'Tis the Season to Analyze Gift-Giving

Posted by: Louis Lavelle on December 5, 2011

Holiday shopping intrigues business school researchers, who want to better understand consumers. Recently, Bloomberg Businessweek shared some of the research that was born of this interest. Here are a few more examples of the kind of studies business school faculty are undertaking to help retailers better understand their customers, and to help buyers shop smarter.

Extreme Couponing: University of Virginia Darden School of Business professors Rajkumar Venkatesan and Paul Farris analyzed more than 500,000 customized coupons that were sent by eight non-competing retailers over 16 months. More than 300 brands were represented in the coupons. They found that many consumers buy the products whether they use the coupons or not. For marketers, this means coupons serve as advertising and are most beneficial when doled out based on consumer’s taste. In addition, the pair stresses that the coupons were most effective when the customer received them as a gift for being a loyal shopper.

Un-Deck the Halls: No one will be surprised to hear that the holiday season stresses out people. What is surprising is that stores decking their halls in lots of holiday tinsel actually drive away those stressed out holiday shoppers, according to research by Nancy M. Puccinelli, associate fellow at Oxford’s Saïd Business School. She found that consumers in a bad mood will avoid salespeople who are spreading the joy and stores that have a celebratory atmosphere. Her advice for stores: tone down the décor, play less obvious holiday music (a classical holiday song with no words rather than “Joy to the World”), and use less demanding language in signage (“Engage in the Season” beats “Make the Season Merry”). Insisting that Grinch-y shoppers manufacture holiday spirit, she says, is the one sure way to lose them.

Taste Trouble: When gift givers buy presents that friends and family like but that they don't care for themselves, they end up spending more money, according to research by Morgan K. Ward, assistant professor of marketing at Southern Methodist University Cox School of Business, and Susan M. Broniarczyk, marketing professor at University of Texas-Austin's McCombs School of Business. They discovered that when people buy gifts that counter their own tastes, they tend to buy something else for themselves to reaffirm their likes. The two use the example of a father, who buys a hip-hop CD for his son, feeling compelled to purchase a Keith Richards CD he sees at the counter. These researchers suggest checking one's ego at the door to save money.

-Francesca Di Meglio

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