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December 09, 2013

Why We Buy

By Ingrid Skjong | Books

Why We Buy
Courtesy of Portfolio/ The Penguin Group

Bargain Fever: How to Shop in a Discounted World (Portfolio Hardcover), by writer and DEPARTURES contributor Mark Ellwood, examines the desire for a discount from every angle with humor and in-depth reporting. We chatted with him about the strategy—and the science—behind the almighty deal. amazon.com; mark-ellwood.com.

Q: What surprised you the most as you put the book together?
Finding out that we are genetically pre-programmed to respond to discounts and deals—that a chemical in our brain urges us to act when we see a sale sign. It’s a hormone I nicknamed “buyagra.”

Q: Seems fitting! Is it the same everywhere?
In the 18 months I spent researching the book I traveled around the world, from Japan to Turkey to Australia to the UK, and I was staggered by the shift in buying attitudes across the world. Put simply, developed nations, which were once so discountphobic, are embracing their inner haggler, while China, India and others are discarding their discount mindset.

Q: How will bargain mania continue to affect luxury goods?
In the 1990s the luxury market boomed, as high-end marques became household names. It’s a situation that combines profit and pitfalls: Expanding in response helped juice these labels’ bank balances, but it also risked tarnishing their cachet. I suspect that luxury will cleave in half, where a customer can decide if he or she is cheap or choosy. Everyday items from a core collection might be produced at large volume and potentially discounted at season’s end; a few ultra-select, truly limited-edition pieces will be custom created—their scarcity driving the retail price skyward.

Q: What does it mean for travelers?
The retail Rubicon that the travel industry will likely be the first to cross is what’s euphemistically dubbed “personalized pricing.” This is a tweak on dynamic pricing that uses more than just market data to decide cost for a certain customer: It factors in that customer’s history, loyalty and spending power. If you consistently book a last-minute business-class fare, for example, it telegraphs to an airline that price isn't a deciding factor for your purchase, so that firm can charge you more. It will make browsing and booking anonymously ever more important. Even now, when it comes to travel I only use an incognito Google Chrome browser window—a price prophylactic.