Be vigilant to avoid impulse purchases

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Courtesy of USA Today:

When shoppers leave a store or website without buying, it’s a big letdown for retailers — they have a far better chance of “selling” the people who browse.

That’s why online shopping cart abandonment, “conversion” and “attachment” are retail buzzwords.

Retailers are doing many things to turn shoppers into buyers and make shopping more convenient. But they also can prompt us to spend more than we intended for things we don’t need or can’t afford.

“Now is not the time to lose our vigilance,” says Mellody Hobson, president of the money management and mutual fund company Ariel Investments. “We’ve done a really good job as a country deleveraging — we have less debt, and we’re on a good path with a positive savings rate.”

But stores need to target the shoppers who have already shown an interest in their products or stores in order to survive, retail experts say.

The belts at the end of clothing racks at your favorite store aren’t just there to help you. You might not head to the accessories department on your own, so the belts increase the chance you’ll accessorize right there.

“In most cases, you can only increase profits by selling people things that cost more or get them to buy more,” says Ken Nisch, chairman of the branding and retail design firm JGA.

Stores are filled with examples. What’s the first thing you see when you walk into most department stores? The makeup counters. There’s rarely a sale on cosmetics, so it’s where stores make some of their biggest profit margins.

The checkout lines at Best Buy or T.J. Maxx are surrounded with alluring impulse “buys” for a reason.

Grocery stores have been doing it forever; now stores, including teen clothing retailer Hollister, have items such as CDs and magazines by cash registers. Ever seen the candy prices at tween retailer Justice?

Websites haven’t gotten as good at keeping people. Sure, many have come up with their own versions of Amazon’s product recommendations, but it still isn’t the same as smelling food cooking or passing a table of scarves that match your new outfit. It’s far easier to shop strategically on a website.

“At the end of the day, the one great thing about Cyber Monday was that it diminished the likelihood you’d make impulse purchases,” Hobson says.

But they’re trying: Major retailers will send those who signed up an average of 21 e-mails this month, marketing software company Responsys says. That’s up from an average of 18.2 e-mails in December 2010 and 13.6 a month earlier this year.

Some other ways retailers are making it easier to shop while increasing the temptation to buy more:

•Earlier Christmases. With stores decking the halls earlier every year, there’s a temptation to start holiday shopping sooner. That can be a great idea when it decreases the stress of shopping in crowded stores. But it also means that you can extend your holiday-related spending by that many more weeks — or at least use Christmas shopping as an excuse to return to the mall for yourself.

•Limited availability. Stores may appear to have less inventory this season. But that may not be true. Retailers are keeping more merchandise in warehouses so they can have more flexibility to ship to stores or website customers. This “gives you the appearance of more scarcity,” and reduces the need for price cuts, Nisch says. It also makes shoppers worry they’ll lose out if they don’t buy it right then.

•Website follow-ups. About seven out of 10 people who put things in online shopping carts don’t buy them, according to research by the “shopping cart recovery” company SeeWhy. Charles Nicholls, SeeWhy’s founder and chief strategy officer, says his company helps retailers, including Lucky Brand, craft e-mail follow-ups to the most-likely would-be purchasers to remind them of their carts and offer assistance. “Customers like these e-mails,” he says.

Avoiding retail temptations helps prevent debt, which Hobson likens to hangovers.

“It’s like when you’re at a party and you know that the next drink is really a bad idea,” she says. “Keep that bad feeling in mind” while shopping.

Jayne O’Donnell covers smart shopping for USA TODAY. Her Confident Consumer column appears Wednesdays. E-mail her at: jodonnell@usatoday.com. Follow on Twitter: www.twitter.com/jayneodonnell. See an index of O’Donnell’s columns

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