Brain Food: To Buy or Not to Buy?

It is somewhat straightforward to call attention to something on the sales floor by offering novelty for the brain to decipher. Yet, to get a customer to actually buy what the retailer has drawn the mind’s eye to is an entirely different matter.

Assuming the retailer has been able to get the shopper’s attention, we can turn our attention to how customers cognitively get around the “to-buy or not-to-buy” question.

Purchasing decisions are based on a combination of the consumer’s set of product preferences and sensitivity to price. When people are shopping, the decision to make a purchase comes after considering the characteristics of the product – whether it satisfies things such as utility and design quality, and finally, how much it costs. Even though customers may believe the product does what it is supposed to do, they can find its price to be a disincentive to buy.

On a brain level, price tags are painful.

The “SHOP task” was part of a study conducted by Brian Knutson and George Loewenstein from the Department of Psychology and Neuroscience at Stanford University. Their interest was whether or not certain neural pathways were activated by how much customers preferred a product; or which pathways were involved when the shopper was deterred from buying something because of its price. Their study aimed to determine whether activation of specific brain areas could be predictors of a customer’s buying decisions.

What Knutson and the other researchers on the team discovered was that the relative activation of one brain area over another can shut down the buying process, or make a product irresistible. Additionally, the results uncovered that activation in three areas of the brain could determine, in advance, whether or not a person would choose to buy something.

As we stand in an aisle looking at an array of products, our shopping brain begins running through a number of processes that try to anticipate a feeling of loss or a feeling of gain.

On a brain level, the “to-buy or not-to-buy” decision involves areas of the dopamine-producing pleasure center (which we can think of as the neural circuitry associated with anticipated gain); the area of the brain called the insula (which is connected to our perception of pain in others, and what we can consider the neural circuitry associated with anticipated loss); and a specific area of the prefrontal cortex called the mesial prefrontal cortex (MPFC) (an area of the brain connected to emotional introspection and autonomic control).

The brains of subjects (shoppers) in the study were observed using an fMRI machine while making decisions about whether or not they would buy various products. To see what areas would light up during the buying process, shoppers were shown products first, then the price tag was introduced, and they were asked to make a decision about buying the product or not.

And here’s how things played out: When subjects were presented with things they could buy without having to make any decisions about whether the price was too high or just right, the pleasure center lit up. The degree to which the pleasure center appeared to be active was dependent on how much they wanted the product. At this stage in the process, the brain is not thinking about the cost of having whatever it is being presented with, it is simply saying to itself, “Oh boy … I want that!”

A moment later, when the subjects were introduced to the price tag, both the MPFC and the insula lit up.

At this stage of the process the MPFC is trying to figure out whether or not the price is too high, too low or just right. Is the deal fair or not? Immediately, the brain is crunching the numbers and discriminating between the desire for the product and the price differential. The customer’s brain is essentially performing a cost-benefit analysis. So while the pleasure center says, “I like this thing. Let’s get it,” the MPFC says, “Hold on a minute. Let’s take a look at some outcomes of what purchasing this thing will be.”

The insula is incredibly adept at picking up signals about pain and is concerned with loss, tying it into aversive feelings. Because the insula is so good at tuning into stimuli that signal the potential for pain, it is hypothesized to play a role in loss prediction.

Since most of us experience “painful” emotions when paying too much for a product or service, we are likely to move cautiously when considering  a new purchase where the price point is high. And, we are likely to avoid a purchase altogether when we feel the price is excessive.

The bottom line of the Knutson study was this: If the insula’s activity was greater than that of the pleasure center –  if the perception of the price being too high led to a feeling of anticipated pain or loss – there was no purchase. If the shopper wanted something, but the price was too high, the insula’s activity overrode the pleasure center’s desire for the object and shoppers were likely to leave it on the shelf. The heightened insula activity also deactivated the MPFC. It actually shut down the process of thinking about whether or not potential gains would outweigh potential losses. The customer simply avoided objects where the prices seemed excessive and were willing to set aside a purchase decision, despite their apparent desire for something.

If, on the other hand, the price point was dropped, the researchers found that the pleasure center activation went up (increased desire and excitement), while the insula’s activation went down (pain and loss being mitigated); and the MPFC was activated (jumping in to work the numbers).

Furthermore, if the pleasure center activation was stronger than the insula, and the MPFC determined the combination of function and price was a good deal, then a purchase was inevitable.

The results of the study show that the brain’s activity is a step ahead of the actual buying decision. Or, at least, that the pre-purchase activity of certain areas of the brain can be used as predictors of buying behavior. Shoppers are making decisions to buy products at the speed of their neural circuitry. Some of these decisions are happening on a completely subconscious level, before our brains even have a moment to “think” about the outcome.

You know that expression, “you don’t have a second chance to make a first impression.” Well, studies like these reaffirm it on a “neuroeconomics” level. In some cases, shoppers aren’t doing all of the mental gymnastics about the outcome of their “to-buy or not-to-buy” dilemma. They are reacting based on a set of old instinctual emotions and doing very little thinking at all.

David Kepron is Vice President – Global Design Strategies with Marriott International. His focus is on the creation of compelling customer experiences within a unique group of Marriott brands called the “Lifestyle Collection,” including Autograph, Renaissance and Moxy hotels. As a frequently requested speaker to retailers, hoteliers and design professionals nationally and internationally, David shares his expertise on subjects ranging from consumer behaviors and trends, brain science and buying behavior, store design and visual merchandising as well as creativity and innovation. David is also author of “Retail (r)Evolution: Why Creating Right-Brain Stores will Shape the Future of Shopping in a Digitally Driven World,” published by ST Media Group Intl. and available online from ST Books. @davidkepron; www.retail-r-evolution.com.