4 Smart Ways to Save $10 on Your Next Grocery Shopping Trip
Use findings in consumer research to outwit marketers and save money.
Posted Sep 29, 2015
In 2014, American households spent an average of $3,971 (or around $330 each month) on groceries. Grocery shopping is indispensable. It is one of the largest consumer spending categories. (For most people, it is fourth largest expense after housing, transportation, and healthcare). Week after week, month after month, shopping for groceries is something we do regularly. Still, buying groceries causes a lot of angst for many shoppers. Spending money each week can be a painful experience.
Fortunately, there is a lot of interesting consumer psychology and marketing science research that has discovered effective ways to help you save a significant amount of money on your next shopping trip (and every trip thereafter). Here are four of them.
1. Cherry-pick from two or (preferably) three grocery stores
Many consumers are fiercely loyal to one grocery store. Such loyalty stems from different reasons: it can be part of family tradition (“My family always shopped at Publix when I was growing up”) or from habit. Alternatively, it may be based on the belief that one’s favorite grocery store really does have the best deals. Such consumer loyalty comes at a price. Where grocery stores are concerned, shoppers usually benefit from fickleness. When they shop at two or three different stores and cherry-pick items from each one, they save significant amounts of money.
There are many reasons for this. The grocery business is highly competitive. Each store tries to specialize. It maintains the best prices for certain items and offers heavy discounts to attract its competitors’ customers and provide something unique to its own customers. For example, one store may routinely have the lowest prices for fruits and vegetables but another may offer great deals on pre-made food items. Such specialization benefits stores by creating a certain image in consumers’ minds. For shoppers, its benefits are just as important. Driving to one store for fruits and vegetables and then to another store for pre-made foods will result in significant savings (but it will add a little extra time and effort to the shopping process).
A two-year study of over 9,500 shopping trips conducted by marketing scientists Ed Fox and Stephen Hoch (and appropriately titled “Cherry-picking”) showed that cherry-pickers, whom they defined as shoppers who visited two different grocery stores consecutively on the same day, ended up saving an average of 5% on each item they bought while buying 67% more items than single-store shoppers.
The lesson is clear: It pays to cherry-pick from multiple grocery stores, especially when you have a long shopping list. Make sure you know each store’s specialties beforehand.
2. Make a budget for each item category, and add a small amount of “blow money”
This past week, I went to the grocery store to stock up on staples. But when I got back home, I found that I had somehow picked up two bottles of cold-pressed juice, a bar of pricey Swiss chocolate, and a bottle of wine. I hadn’t planned on buying any of these things and they increased my grocery bill considerably.
Not only do such unplanned purchases elevate shoppers’ bills, but they also contribute to a bulk of grocery store profits. So it’s not surprising that marketers spend a lot of time and effort in figuring out how to get shoppers to increase unplanned spending. Research has shown that unplanned spending increases during these two circumstances: 1) When shoppers don’t have a list or a budget in mind, and 2) when they spend a lot of time in the store walking through every aisle.
Many of us intuitively know that having a shopping list helps control spending. But you can do even better. In addition to a shopping list, having a budget for each product category on your list is very useful. A study conducted by consumer researchers Karen Stilley, Jeff Inman, and Kirk Wakefield found that going grocery shopping with product-category-level budgets ($20 for fruits and vegetables, $10 for bread and cereals, etc.) helps to limit spending to necessary purchases. The researchers also discovered that consumers unconsciously assign a certain amount of “blow money” to splurge on impulsive purchases during the shopping trip. Having such blow money earmarked in a budget can provide a safety net and also allow controlled indulgence.
Make a budget for each product category on your list before you go shopping. Add a small amount for frivolous things.
3. Visualize your trip through the store beforehand. Only visit selected aisles
Another thing marketers try to influence is how shoppers navigate their way through the store. In one neat study conducted by marketing scientists Sam Hui, Peter Fader and Eric Bradlow, the authors divided a grocery store into 96 zones and studied the travel paths of about a thousand shoppers through the store as they went about their shopping. The researchers found that walking through the store in a scattered way, from here to there and back again (as opposed to a focused way) meant that shoppers covered more of the store’s zones (59 vs. 38), spent more time shopping (72 minutes vs. just 29 minutes for focused shoppers), and purchased more items (9.6 different product categories vs. 4.5).
Other studies have shown that the longer shoppers stay in the store and the more of its aisles they walk through, the more products they see that trigger purchases (“We are almost running out of salad dressing, let me buy a bottle”). So stores are always looking to expose shoppers to more displayed products. A recent study conducted by Sam Hui, Jeffrey Inman, Yanliu Huang and Jacob Suher describes one clever way marketers use to get shoppers to cover more of the store’s aisles. In the study conducted in a grocery store in Philadelphia, the researchers gathered shopping lists of customers and then gave them a coupon for something that was not on their list. For some shoppers, the coupon was for an item they would have to walk a longer distance through the store to get (based on their list) whereas for others, the distance they had to walk was not much. Those who had to travel a greater distance ended up spending more than 50% more ($21.29 vs. $13.83) than those didn’t have to travel much to use their coupon.
What do these studies mean for smart shoppers? If you want to spend less, cut down on how much of the grocery store you walk through, limiting your path to aisles where the items on your shopping list are located. Getting through the grocery trip quickly and efficiently is a sure-fire way to save money and reduce unplanned purchases.
4. Shop with crisp $20 currency notes
By now, virtually all thrifty shoppers know that it pays to use cash instead of credit cards for your grocery shopping. This is because consumer research shows credit cards are “spending facilitators” (using psychologist jargon), and they can increase spending by 20%, 30% or even more depending on the product being purchased. In a study aptly titled “Always leave home without it,” marketing scientists Drezen Prelec and Duncan Simester auctioned off tickets to professional sports events and controlled whether buyers could pay with a credit card or had to use cash. Those who could use credit cards offered up to 113% more for the same tickets.
Ok, so it is clear that cash is preferable. But not all cash is the same. The currency’s appearance and denomination both matter in how much of it is spent. A recent study conducted by consumer psychologists Fabrizio Di Muro and Theodore Noseworthy found that when participants were given crisp bills, they were likely to spend less than half as much as those who received dirty bills. Research also shows that carrying the currency in relatively larger denominations such as $20 bills reduces spending than if the same amount is carried in smaller bills of $1 and $5. This is called the “denomination effect”.
Smart shoppers can use these findings: Don’t just leave your credit cards at home, but if you want to even more save money, go to the bank first and get crisp, new $20 bills to take with you.
So there you have it. Based on clever research conducted by marketing scientists and consumer psychologists, these are four smart ways to save $10 (or more) on your next grocery trip. Even if you just use one of them you will save money. But if you adopt all four, you are bound to save a lot when you go shopping. After you have tested these methods out, let me know if they worked for you.
I teach core marketing and pricing to MBA students at Rice University. You can find and download a lot of my academic and some of my practitioner-oriented writing at SSRN. If you can’t find something old I have written, shoot me an email and I will send it to you. Some of my writing for managers and business people can be found at HBR.org and I also write a blog called “The Science behind Behavior” on Psychology Today.