Trying Too Hard to Track Spending Counterproductive for Grocery Shoppers

“When shopping in a grocery store, the chaotic, information-rich environment can tax a shopper's ability to mentally calculate the total basket price,” says Koert van Ittersum, assistant professor of marketing at Georgia Tech College of Management. “Executing many arithmetic operations with multi-digit pricing is demanding. Our findings show that shoppers tend to be more accurate when they employ short-cut strategies in their calculations.”

Titled “Trying Hard and Doing Worse: How Grocery Shoppers Track In-store Spending,” the study was conducted by van Ittersum in collaboration with marketing scholars Joost M.E. Pennings of Maastricht University and Brian Wansink of Cornell University. The paper has been accepted for publication in the Journal of Marketing.

Examining the behavior of shoppers in both a high-income and low-income grocery store, the researchers learned that strategies employed by consumers to keep mental computation simpler include rounding prices up or down, combining compatible prices (for example, $1.19 + $0.82 is almost $2), and multiplying an estimated average price by the number of items in their basket. These short cuts tend to work better than trying to calculate the total sum down to the last penny.

According to the study, 84.6 percent of shoppers “at least sometimes” keep track of how much they are spending at the grocery store.

And on average, they underestimate their total basket prices. “Our results show that shoppers on tight budgets, those most motivated to be accurate, may also be most at risk for spending more than their budget,” van Ittersum says.

While motivation to be accurate seems to have a counterproductive effect on calculation accuracy because of the mental demands involved, shoppers with a lot of estimation experience tend to do better if they're highly motivated, according to the study.

Shoppers' success at effectively monitoring their spending has serious implications for retailers, note the study's researchers. “When shoppers must pay more than they expected, they tend to hold the retailers responsible and feel dissatisfied with the store,” they write. “But when they pay less than expected, they attribute the benefit primarily to themselves and their store satisfaction remains neutral.”

To improve customer satisfaction, retailers could help customers become more accurate estimators by informing them about effective computation strategies, the researchers suggest. “Retailers could also invest in the growing array of technical solutions that enable shoppers to track in-store spending accurately, including shopping cart scanners,” van Ittersum says. “Shoppers could help themselves by sticking to shopping lists and using calculators.”

Additional information:
http://mgt.gatech.edu/news_room/news/2009/articles/groceryspendingstudy.html