Got To Be Good Looking 'Cos He's So Hard to See

Here is another entry from the "save money by not bargain hunting" file. Have you ever decided to feed your bargainista desire by getting together with a bunch of friends and piling in the car for the long drive to the outlet mall? It turns out they put those discount centers in the middle of nowhere for a sound psychological reason. The harder something is to attain, the more we value it. You could grab something out of the bargain bin at the store on the corner, but that is too easy, which makes it easy to avoid. When you go to all the trouble of driving to find bargains, you're much more likely to come back with something.

I learned about this through the blog Sociological Images, which has an article on the psychology of outlet malls:

...as Ellen Ruppel Shell explains in Cheap: The High Cost of Discount Culture. It turns out that being difficult to get to is, in fact, part of the appeal of outlet malls. The fact that they often require a drive of an hour or more signals to consumers that they must have really good deals. That’s the payoff for inconvenience — it’s harder and more time-consuming than going to your local mall, but in return you’re getting a great bargain...

According to Shell, though, that’s pretty typical of outlet malls: they often don’t really provide great bargains. But they provide the illusion of bargains, and a motivation for thinking you’re finding them...

It turns out that the more trouble people go through to get to an outlet, the more they overestimate the amount of savings compared to prices at regular stores. The very fact that it was hard to get to convinces people that it must provide something fantastic; if you aren’t saving a lot of money by going there, why on earth would it be so far out of the way? And the more remote it is, the cheaper the products must be!...

If you’ve driven an hour or more one-way to get great deals at the outlet mall, you are primed to believe you’re getting bargains because otherwise you just wasted a lot of time, effort, and gas for nothing. Once you get there, you’re psychologically motivated to believe your effort was worth it, and you do that by buying stuff and thinking the price is a steal...

We overestimate what the original value of the item must have been and focus on the difference between that hypothetical price and the outlet price, rather than on the objective price itself. And consumers tend to discount the cost of getting to the outlet, not including the cost of gas and their time into the price of the items they buy.

Marketers know us better than we know ourselves.