Why do we spend so much for a “free gift”? We went mystery shopping – armed with the latest research on consumer behaviour – and found these freebies are fine-tuned to make you part with your cash.
It’s the signature sales tactic of beauty brands from Estee Lauder to Lancome, the free gift with purchase. We went mystery shopping – armed with the latest research on consumer behaviour – and found these freebies are fine-tuned to make you part with your cash.
During our shopping trial, skincare and make-up companies Clarins, Estee Lauder, Lancome and Shiseido all ran gift-with-purchase promotions, offering shoppers a complimentary 5- or 7-piece gift of skincare and make-up items if their purchase met specific criteria.
For all 4 deals we looked at, shoppers needed to purchase 2 or more items from the beauty brand. Clarins and Lancome specified at least one item needed to be a skincare product. For Estee Lauder, one had to be skincare or foundation.
Why skincare? Skincare items can be double, quadruple or even 8 times the price of a make-up item. The “one to be skincare” rule means customers are likely to exceed their intended spend, unless they’re already planning to buy 2 qualifying items.
University of Auckland consumer behaviour lecturer Dr Denise Conroy says it’s likely beauty companies are also playing the long game with future sales in mind. Shoppers may take home their gift with purchase and like the eye cream or the shade of lipstick so much they’re happy to pay full price for it next time.
And if the free item isn’t quite for you? “People might on-gift them as well, thinking it’s not right for me, but might be right for my friend, my mother or my daughter,” Dr Conroy says.
Beauty gift packs also tend to feature pricey anti-ageing face creams, eye gels, and face and body treatment oils over more general crowd-pleasers such as mascaras. This strategy allows a company to maximise its financial return if a customer buys a full-priced item based on the gift. “Skincare items are the most profitable products,” Dr Conroy says.
Gift-with-purchase promotions rely on the – sometimes irrational – attraction giveaways can have for shoppers. Beauty product freebies, in particular, can be so appealing salespeople need to do very little to make their sales while the promotion runs, Dr Conroy says.
When a product is promoted as free, we may overlook or unconsciously minimise the negatives in the deal. In the case of beauty giveaways, shoppers may focus on the so-called free gift, discounting the fact they may have spent 2 or 3 times what they meant to.
By not having a straight deal to weigh up, such as “spend $150 and get a gift”, it’s also harder for shoppers to work out exact costs and make an informed choice before they commit to the purchase.
For retailers, gift-with-purchase promotions are not only a way of boosting current but also future sales by creating a feeling of reciprocity. We have a tendency to want to pay someone back when we receive something, no matter who it’s from. Even a small bonus can leave us feeling positive.
Beauty companies play on this, touting the generosity of their multi-piece giveaways. In its advertising posters, Lancome valued its August freebie at “over $200”, while Shiseido promoted its “luxury gift” as worth “over $208”.
One way we may, consciously or unconsciously, repay such favours is by talking up the brand to our friends and family. Giveaways are one of the most reliable ways for a company to boost word of mouth referrals, according to Journal of Marketing Research experiments based on 2000 volunteers.
There’s another benefit of free gifts for the beauty companies – fewer complaints and returns. Research published in Psychology & Marketing, based on surveys of hundreds of shoppers, found people didn’t want to risk losing their gift and were therefore less likely to return the paid-for item.
If you’re taking up a gift-with-purchase offer, we recommend reading a copy of the terms before you buy. In most cases, the promotional posters and brochures should detail these, so you can check while you’re browsing.
Retailer: Farmers
Criteria: Purchase of 2 or more Clarins products, one being skincare (excludes gift sets, value packs and clearance items)
Contents of gift:
Value (based on full-sized prices): $193
Full-sized items? None
Shopping experience: Sales assistant answered mystery shopper’s questions on lower-cost skincare items to qualify for promotion, including self-tanning products.
Retailer: Farmers
Criteria: Purchase of 2 of more Estee Lauder products, one being skincare or foundation
Contents of gift:
Value (based on full-sized prices): $253
Full-sized items? Yes. Pure Color Envy Sculpting Lipstick is 3.5g in gift, but full-priced version ($63) is 3.1g
Shopping experience: Sales assistant answered mystery shopper’s questions on lower-cost items to qualify for promotion, including make-up remover.
Retailer: David Jones
Criteria: Purchase of 2 or more Shiseido products (excludes tools, empty cases, promotional packs, Concentrate Range and Moisture Mist)
Contents of gift:
Value (based on full-sized prices): $204
Full-sized items? Yes. Perfect Cleansing Oil is 180ml in gift and full-priced item ($71)
Shopping experience: Sales assistant told one mystery shopper at least one skincare item must be purchased to qualify, which is contrary to Shiseido’s terms and conditions (see criteria). When another mystery shopper visited, the correct rules were provided.
We were offered a choice with Estee Lauder’s gift with purchase: a small pottle of its protective day cream or its anti-ageing night cream. Clarins’ promotion also had several options our shopper could select.
The chance to pick your own gift helps build the attraction of the deal. Dr Conroy says the tiny amounts in the pots of skin cream or eye serum mean the product will run out in about a week, an opportune time for return sales as the consumer’s last shopping (and gift-opening) experience is fresh in their mind, she says.
“This is less likely to happen with a mascara or lipstick given that even a small size will last a relatively long time.”
Smaller items can also hold value for shoppers because they’re convenient to pack when travelling, she says.
By Olivia Wannan
Investigative Writer
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