To lure customers, Shu says businesses need to provide “a justification and a deadline,” citing Disneyland as an example. The park promotes a visit as “a special occasion” for creating lasting memories—exactly the sort of experience that Kivetz’s work suggests people value in retrospect—and it also gives visitors a free pass on their birthday. “They’ve convinced people to take advantage of that special occasion, and bring other people along,” notes Shu.
Like Disneyland, luxury retailers have long had to figure out how to overcome customers’ natural inertia. Unlike less pricey stores, they tend not to attract idle browsers who make impulse purchases. “You may only see customers a couple of times a season,” says Michael Calman, a luxury-retailing consultant and former senior vice president for marketing at Bergdorf Goodman. “You’re looking for ways to increase that visit rate.”
Special events, such as charity benefits or trunk shows, are time-honored ways for high-end stores to give customers justifications and deadlines. Another technique, which could be adapted by other businesses, is a short-term promotion in which customers earn quickly expiring gift cards. For every $500 spent, a customer might get a $50 gift card good for a two-week window starting a week later. Alternatively, customers who regularly buy clothes but not accessories might be offered gift cards good only for purses or shoes, or buyers in the women’s department might get cards for the men’s department. Two local businesses could even cooperate by, for instance, offering restaurant diners a $10 gift card at a wine store for every $100 they spend on meals.
The deadlines get shoppers into stores, the tiered promotions encourage them to stretch their spending a bit, and the incentive system provides a justification. Calman, who pioneered this program at Bergdorf’s, says, “The customer feels that through shopping this type of promotion, they have actually earned the gift card.” With the card’s use-it-or-lose-it deadline fast approaching, customers tend to come back quickly.
During the stimulus debate, some economists, including Edward Leamer of UCLA, suggested that quickly expiring gift cards might boost the economy more effectively than temporary tax cuts, which people tend to put toward savings. Although you could use a government-issued gift card for groceries you’d buy anyway and bank the savings, people tend to treat gift cards differently. When you get a gift card, Leamer noted, you not only tend to spend it on something you wouldn’t otherwise buy, but often wind up spending a bit extra—the perfect prescription for Keynesian stimulus.
Whether designed to boost a sagging economy or just generate sales, these promotions naturally raise the question of whether consumers should succumb to such lures. Which is the real you: the present self who wants to stay in bed rather than exercise and who runs errands instead of visiting a museum, or the future you who wants to be fit and have happy memories? The you who avoids temptation by staying out of the mall, or the you who wishes you hadn’t been such a hermit?
They are both real, of course. The intimate contest for self-command never ends, and lifetime happiness requires finding the right balance between present impulses and future well-being. We know we need bosses and deadlines to help us get work done. But sometimes we can also use an external push to make us have a good time. In both cases, our future self will appreciate the help.