How do companies use neuroeconomics to market their products?

A lot of my work in neuroeconomics is specifically consumer neuroscience, meaning that it is targeted at addressing consumer research questions. While some companies run their own “neuromarketing” studies, several draw from consumer neuroscience findings like mine to inform their marketing strategies. As one example, I’ve talked to firms about the kinds of products they might use in their “recommended” items when shopping online. Suppose you’re on a page for a sweater and thinking about adding it to your cart. You might see other recommended products displayed on the page. I’ve done eye-tracking work suggesting you’re more likely to buy the sweater if it “matches” the recommended products, like seeing your preferred sweater with other sweater options. The presence of matched products on the page helps you feel more engaged with a “sweater-specific” decision. But if you’re seeing mismatches, like earrings or even home goods, you look around more and you’re less likely to buy. The range of mismatched products (literally) takes the focus off sweaters in particular.

How can consumers make decisions that may feel as rewarding as buying a product but have a more sustainable impact on the environment?

The good news for us all is that the same brain areas that respond to the reward of buying things are also the ones that respond to life’s other pleasures. So beyond necessities, we have options for treating ourselves in different ways, including more sustainable ones. It doesn’t have to be a sacrifice – maybe a massage is a more sustainable option than a product made out of non-recyclable plastic. Another facet of this is newness – we like novelty and new things. So, in some cases we lose the feeling of reward with what we own over time. Even if we still enjoy our things, it’s hard to resist the reward of a new item. But consumers are already recognizing that “new to me” can be just as rewarding and that there are joys of discovery or in renewing something’s value.

How does your work help people be more intentional with how they consume?

The most useful advice is probably some of the most boring advice – to be a more conscious consumer, think about what your goals are before you get into shopping situations. Impulse purchases are called that for a reason – as I mentioned, your brain is always browsing. If you don’t plan ahead for how much you want to spend (and why) it’s harder to construct those plans in the moment. That’s also why shopping lists are a key decision-making tool. Another thing my research suggests is to remember to take a step back and open your “consideration set” – remind yourself of the other things you could do with your money (and your time!) If the product you’re thinking about still wins that decision, maybe it’s the right thing to buy after all.

To learn more about Karmarkar’s research, watch this video, “Your Brain on Shopping,”produced by Patagonia, or this video interview with Poets and Quants, titled “The Neuroscience of Marketing.”