Psychology of Buying

14th Aug 2022

Psychology of Buying

The 2nd motivation for buying is the Fear of Loss. In my observation of customer behavior for 2 decades, I found that when customers feel they are going to miss out, they buy just to follow the latest trend. For example when an Annual sale is announced, consumers buy clothes or electronics on the 1st day, believing the same items will not be available later.
Online retailers are experts at creating the fear of loss theory by showing exactly how many items are left. You might be shopping for a shirt and when you select a colour and size, you will see a pop up that says “Hurry, only 2 left”. This can make customer anxious and thus more likely to make a buy than avoid missing the opportunity. During a sale, most customers end up buying more than they require because of the fear of loss theory.
NFOs in Mutual funds or limited period discounts in buying a car or home or investments is an effort to trigger the fear of loss in customers.

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