Why nudging makes you buy more, but consume less!

Subtle details at the point-of-purchase can have a powerful sway on what we buy. Ever since Thaler and Sunstein coined the concept of nudging in their 2008 book Nudge, its underlying psychological principles have been quickly embraced by those seeking to influence consumer behavior.

Nudging consumer behavior

For example, manufacturers happily introduced intentionally positioned expensive options in their product ranges (thereby benefiting from the anchoring effect, which makes the regular options feel more affordably priced). Retailers re-arranged their shelves to benefit from similar effects stemming from brain-friendly price comparisons. Key products are promoted with labels that indicate their popularity, authority or scarcity, which tap into the fundamental decision shortcuts in our brains. And in the case of complicated choice sets, oftentimes a single choice is presented as the default option, so our brains can arrive at a decision without spending too many cognitive fuel.

Many of the nudge examples above have been extensively tested inside and outside the consumer domain. They help target products stand out, while at the same time minimizing cognitive effort of the shopper, which ultimately makes us buy more products. 

However, rarely have researchers dared to venture into what happens after the purchase decision has been made. Does nudging cause us to consume the product differently? Does it affect the rate of consumption? As it turns out, it does.

Do nudges backfire long-term?

Let’s say a nudge has caused us to buy more healthy fruits and vegetables on our shopping trip. Does this affect our consumption of these healthy foods? Or does the nudge only fill up basket size, while we simply continue our regular consumption rate?

This question has been addressed by Polman & Maglio (2024), who studies the longitudinal effects of popular nudges such as the default effect (making a single option the default choice), the compromise affect (people like to pick the medium option among a choice set) and the decoy effect (adding an unattractive option in order to make the target option more attractive by comparison). Their study marked the longest-running randomized experiments on the effects of choice-set nudges.

The researchers measured whether nudging was able to influence which option shoppers chose, and then measured their consumption rate the weeks and months after. Interestingly, while the nudges succeeded in guiding choice at the point of purchase (for example, buying more healthy foods), it did not affect consumption rate of those items. Quite the contrary, the average rate of consumption actually diminished.

Why does nudging appear to work at the point of decision-making, while simultaneously hitting the brakes of consumption further down the road? The authors argue that, because nudging tends to sway more people to buy the product (for example, health foods) who normally wouldn’t have bought it, the composition of buyers suddenly faces an influx of not-so-passionate buyers who bought on a whim but are relatively uncommitted to the product or service. Nonetheless, in the present study there’s still a net positive: while the nudge causes the average number of sessions per gym member to go down, it results in a higher total of gym members and sessions overall.

Is this good or bad?

Being nudged will increase the likelihood of you initially buying the product, but also decreasing your rate of consumption afterwards. Is this a good or bad thing?

That depends on the type of product, as well as the stakeholder you’re asking. When successful, nudges not only increase choice-share but also result in a shorter period of active consumption. Many subscription-based service providers may be quite pleased that increased subscriptions will go hand-in-hand with a decrease in actual usage. 

However, from a consumer perspective, the authors argue this could be detrimental for target behaviors where a steady stream of active consumption may be necessary, like going to the gym many times a month (after joining) or eating several fruits and vegetables a day (after buying them). A critical avenue for future research is therefore how to nudge active consumption instead of merely the initial choice.