For Those who Love to Save, It's Always Cherry Picking Season

by Matt Bell

Doesn't it often seem as if saving money takes a lot of time and effort? What with coupon clipping, making price comparisons, and trying to remember which store usually has the best deal on what? Perhaps nothing more clearly signals a serious commitment to saving money than "cherry picking," the practice of going from store to store, buying only each store’s most deeply discounted items that week.

Many retailers put different items on deep discount each week trying to lure us in with those "loss leaders" and then hoping we'll buy additional higher-priced items. But cherry pickers are nobody's fool; they buy only the deeply discounted item and then move on to the next store. Do such super shoppers really win in the long run? Doesn't the added time involved make it not pay out in even the most basic cost-benefit analysis? Well, cherry pickers rejoice. Research from two professors concludes that cherry picking makes perfect sense.

The research, from marketing professors Stephen Hoch of the Wharton School of the University of Pennsylvania and Edward Fox at the Cox School of Business at Southern Methodist University, found that cherry pickers do indeed save enough through their efforts to offset the extra shopping time required.

Their research compared the behavior of three kinds of shoppers: store loyals (people who shop at the same retailer more than 80% of the time), store switchers (people who shop at multiple retailers but not on the same day), and cherry pickers (people who shop at two or more stores on the same day at least once a month). And this was no casual study. The professors analyzed more than 23,000 purchases made during nearly 10,000 shopping trips over a two-year period at two Chicago-based supermarket chains.

For each shopper on each shopping day, the researchers determined whether they paid the lower or higher price at the two stores for all purchases in 10 categories for which they had access to detailed price data. The researchers calculated the amount the shoppers saved relative to the higher price. On days when they visited two stores, cherry pickers saved nearly 16% off the higher price, compared to only 10.5% on days when they shopped at just one store. In dollar terms, when shoppers cherry-picked they saved nearly $23 off the higher prices available on days when they visited two stores, compared with less than $8 on days when they went to just one store.

The study also found that all three groups of shoppers spent more money and bought more items on days when they visited two stores instead of one, although the cherry pickers spent the most – 125% more ($115) than on one-store days. As a result of their pantry-loading, the marginal benefit that cherry pickers gained from the extra store visit was substantially larger than that enjoyed by the other types of shoppers.

And therein lies one of the key differences between cherry pickers and other people. While there are few, if any, demographic differences, cherry pickers have a very different mindset. They take their shopping seriously and have become especially adept at taking advantage of extra savings opportunities that come with a second store visit. While they do engage in small, single-store visits designed to buy just a few items, when they do their cherry picking they seem intent on stocking their homes to the rafters.

Professor Hoch said, "When people go cherry picking, two things happen. They double the number of discount opportunities that will be available to them because they go to two stores. Second and most importantly, is that these shoppers buy more items than other shoppers. They save a lot not only in percentage terms but in dollar terms, which is what really counts."

Fox and Hoch closely examined the amount of time cherry pickers spend shopping and how much money, based on Chicago-area wages, they could earn during that time. The results definitively showed that cherry picking is economically justifiable for many households when weighed against "reasonable estimates of their opportunity costs."

Think about that the next time you read the Sunday circulars and then grab a map to figure out the most efficient route to the stores with the best prices.