Here’s a radical suggestion based on solid science - price doesn't really matter, it's how you present it.
Let me explain by way of a few examples. To begin with, remember this: The human brain is lazy: Fact! This means that it often doesn’t bother to do the ‘adding up’ in-store. If you have a product that is £12 with free gift wrapping or the same item offered at £10 plus £2 for gift wrapping, more shoppers who buy the gift wrapped product will select the £10 option because at a headline level £10 is less than £12, right?
Round £ pricing
Most of us recognise that round £ pricing works, but many are less sure as to how and why it works. In addition, it doesn’t work all of the time. So what’s going on?
A paper by Monica Wadhwa and Kuangjie Zhang published in the Journal of Consumer Research (April 2015) describes how rounded numbers are more fluently processed by the brain. Rounded prices (e.g, £50.00) encourage reliance on instinct and feelings. In contrast, because non-rounded numbers (e.g, £41.38) are dis-fluently processed, they require more rational thought and mental effort.
So what does this mean in-store at the fixture? Simply put, if you want shoppers to just grab your brand and go, round the price. But if you want them to embark on some mental activity at fixture, add some syllables to your price. Incidentally, shoppers also perceive prices with more syllables to be higher in magnitude than shorter ones with fewer syllables: £8.10 is shorter and rounder (ergo more appealing) than £7.37.
Price ticket design
Here’s another one from the psychologists (Coulter 2002). If you want shoppers to mentally perceive your price to be lower, guess what: If you position it lower on the price ticket, they will do just that. What’s more, if you also place the price on the left of the ticket, shoppers will perceive it to be lower still. Why? Because as a species, we have directional associations to quality and price: Up equates to better, more, higher. Whereas left relates to less, fewer, nearer to zero.
And finally, in a paper by Coulter, Choi and Monroe entitled Comma N' cents in pricing, they provide another scientific consideration related to displaying prices. They say that including commas (e.g. £1,599 vs. £1599) and cents (e.g. £1599.85 vs. £1599) can change how the price is perceived by a shopper:
- Firstly, the comma adds syllables; ‘one thousand five hundred and ninety nine pounds’ vs. ‘fifteen ninety nine’.
- Secondly, the pence not only adds syllables, but also length (ergo size) to the price on the ticket.
I have amassed 491 scientifically validated rules associated with how the human brain processes special offers and prices, and it is amazing how many household name stores and websites continually break these rules day in, day out.
As a result, they are simply throwing profit down the drain every day.
Think of it this way: you can either give away more margin by cutting deeper or you can spend a fraction of the discount amount making the price visually and psychologically more effective.
And anyone who says: "I can't change it as it's a template" should perhaps 'do the maths' as they say (ooh, something for the accountants to do then!)