While renting Atonement at Blockbuster Video yesterday, I had to wait in line 5 minutes to check out. The checkout line is roped off so it meanders around the store past candy, discounted movies, posters, and other movie paraphernalia. I picked up most of the tempting trinkets, but didn't buy. I noticed that most people pass by these items. I was taught that they are the impluse items that people buy without any rational thinking. Yet, my experiences differ. I offer these anecdotal reasons.
(1) People's choices are constrained by their income. By the time they finally get to the checkout counter, they've spent their disposable income. (2) By the the the impluse items are placed on sale by the checkout counter, the items have reached diminishing utility. In other words, the items are worthless or they would have been already sold. (3) Consumers are rational and know that the items are impluse items and don't want to fall for that old trick. (4) Blockbuster's checkout services are so slow that by the time a customer can checkout, the impluse has been replaced by reason. So customers rationally weight the costs and benefits and decide not to buy. (5) Blockbuster is employing a two tier pricing system trying to capture the consumer's surplus. This is like the theater charging a high price for popcorn. So Blockbuster has captured the consumer's surplus with the high price of their movies and there's no surplus left to be spent on trinkets and impluse items.
I have bought stuff at the checkout counter on impulse. What I'm saying is that as a strategy to move merchandise, placing discounted items near the checkout is a poor strategy. A better strategy would be to enhance the ambiance of the goods by giving them away to those who buy instead of rent movies.