Alchemy: The Dark Art and Curious Science of Creating Magic in Brands, Business, and Life

by Rory Sutherland

The two categories of retailer who have weathered the global economic instability best in recent years are those at the top end of the price spectrum and those at the bottom. Some of this is a result of widening wealth inequality, but a glance at the demography of shoppers shows that it is not quite that simple; for instance, the bargain department store TK Maxx has a customer base that perfectly matches the UK population.* In fact, we derive pleasure from ‘expensive treats’ and also enjoy finding ‘bargains’. By contrast, the mid-range retailer offers far less of an emotional hit; you don’t get a dopamine rush from mid-market purchases. I was reminded of this idea recently when my wife and I were buying bed linen. After wandering around a department store for half an hour, I explained that there were only two sums of money I was prepared to spend in the store: ‘zero’ or ‘a lot’. Zero would be good, as we could keep our existing linen and spend the money on other things. A lot of money was also acceptable, as I could then become excited by thread counts, tog ratings and exotic goose down. By contrast, spending something in between would have given me neither of these two emotional rewards.