Automated Buying

  • As we head into the busiest shopping month of the year I thought that you might be interested in a couple of articles that discuss how technology is changing the way we shop. Everyone knows that 'Black Friday' changed dramatically when 'Cyber Monday' came along.

     

    But the changes in shopping goes much deeper than that. The first article is from the Harvard Business Review link here. It suggests that 'predictive shopping' will change the way we shop. To greatly simplify the article, super sized databases with all kinds of info on when/what you buy will be connected with your internet devices to predict when you'll want to purchase something.

     

    Some purchases like repeat buys will be easier for them to predict. Perhaps you buy dog food every second time you grocery shop. An app could automatically add dog food to your grocery list every other time you shop.

     

    Other suggestions would combine data from different sources. Suppose you booked a flight and a hotel. Then used an app to take Uber to the hotel. An app could use that data and gps to suggest local stores that could provide any toiletries you forgot to pack.

     

    I won't get into the discussion of whether it's good to have all that personal data out there. Speaking for myself I'm not all that fond of store loyalty programs because I don't like them tracking my purchases. So I'm probably not going to want them to add anything to my grocery list. But for some people that might be an acceptable trade-off. You'll have to decide for yourself.

     

    The second article was in Wired and was titled "Apple Pay Will Change the Way Your Brain Thinks About Buying Things". If you're not familiar with Apple Pay here's what it does. "With Apple’s new MacBook Pro launched last month, all you have to do is tap your finger to the Touch ID scanner located on the Touch Bar to buy..."

     

    Easier than pulling out your credit card and keying in your number? Of course! Safer than leaving your card information at the store's site? True again! But could it change the way you emotionally relate to spending money?

     

    Researchers think that it could. When you take dollars out of your pocket and trade them for a purchase you feel a sense of loss of those dollars. Credit cards significantly eroded that feeling. In fact, we don't feel a sense of loss until we pay the bill later in the month. Which may be why people on average spend more if they're using a credit card.

     

    Apple Pay takes that one step further. When we just use a finger to tap on the 'buy now' button we actually feel a sense of empowerment! Our brain gets positive feedback, not any sense of loss! We'll have to wait for awhile before research can show the effects. But it doesn't take much of a leap to think that Apple Pay (and the similar apps to follow) will only cause us to spend even more!

     

    So what can you do to protect yourself? The first step is education. If you know how you're being manipulated it's much easier to resist the temptation. We'll do our best here at TDS to help keep you informed. If you haven't already you might want to read a recent article we did entitled The Subtle Psychology of Credit Cards.

     

    And, if you don't already have a spending plan I urge you to create one now. You might want to start with an article I wrote called "A Spending Plan for Frugal Living". We also have a whole section of the library dedicated to spending plans.

     

    Finally, read the newsletters that we send to you. I know that you're busy. So am I. But the time you spend reading an article or two could save you many hours of work to pay for purchases that you didn't need to make or that could have been bought for less money. And, I can't speak for you, but I'd rather learn how to save money than work to pay for overly expensive purchases!

     

    Keep on Stretching those Dollars!
    Gary


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