Beware of Your Mindset When Renting Research from UMD's Smith School of Business Shows Riskier Thought Patterns
COLLEGE PARK, Md., Aug. 12, 2014 /PRNewswire-USNewswire/ -- Commitment-shy shoppers carefully evaluate products before making a purchase, but new research from the University of Maryland's Robert H. Smith School of Business shows that something different happens when the same people think about renting.
"They are less stringent about what they take home and how much they acquire," says Smith Professor Anastasiya Pocheptsova, Ph.D. "They examine fewer options, invest less time gathering information and settle more willingly on second best alternatives."
Pocheptsova's study, coauthored with colleagues from Columbia and Yale universities, follows a recent surge in rental options. "Consumers today can rent almost anything, not just traditional big-ticket items such as houses, cars, furniture and appliances," Pocheptsova says. "One of my favorite retailers is Bag Borrow or Steal, an online store that rents designer handbags and accessories."
Pocheptsova says marketers realize that shoppers make decisions differently when renting — even when spending the same amount on the same products.
"Completing a purchase can come with a sense of irreversibility that distresses shoppers concerned about the long-term consequences," she says. "Some shoppers anticipate buyer's remorse or worry about foregoing better options that might appear later."
She says the same shoppers perceive renting as less daunting, and many do not realize their minds shift into a more reckless mode when they make rental decisions. To test how the different mindsets work, the researchers conducted a series of experiments at the University of Maryland.
First, they advertised digital movie downloads. Later, they advertised small appliances. They offered the same prices for identical products, whether the deals were framed as rentals or purchases.
When shoppers could choose between renting or buying, more chose buying. But when shoppers only saw the products advertised one way or the other, more chose to acquire products when the deal was framed as a rental. They also acquired more of everything, gathered less information, and spent less time thinking about their choices before spending their money.
"Consumers should be mindful of their different modes of thinking," Pocheptsova says. "Standards of diligence vary, but a dollar is a dollar regardless of whether you spend it for renting or for buying.
SOURCE University of Maryland's Robert H. Smith School of Business