Although interest in smart shopping carts is increasing, both retailers and consumer groups have concerns about how real-time spending feedback will influence shopping behavior. Building on budgeting and spending theories, the authors conduct three lab and grocery store experiments that robustly show that real-time spending feedback has a diverging impact on spending depending on whether a person is budget constrained (“budget” shoppers) or not (“nonbudget” shoppers). Real-time spending feedback stimulates budget shoppers to spend more (by buying more national brands). In contrast, this feedback leads nonbudget shoppers to spend less (by replacing national brands with store brands). Furthermore, smart shopping carts increase repatronage intentions for budget shoppers while keeping them stable for nonbudget shoppers. These findings underscore fundamental unexplored differences between budget and nonbudget shoppers. Moreover, they have key implications for both brick-and-mortar and online retailers as well as app developers.

All over the world the economic crisis has raised the number of households which are below the poverty line. A careful tracking of expenditures has become increasingly necessary to avoid financial distress. Models of spending behavior often implicitly assume that budget shoppers know how much they spend while shopping. As demonstrated here, this assumption is the exception rather than the rule