FREE guidE
Download

No. 14 of 36 The Decoy Effect

In marketing, the decoy effect is the phenomenon whereby shoppers and consumers will tend to have a specific change in preference between two options when also presented with a third option.

Imagine you are shopping for a kitchen blender. You see two options. The cheaper one, at £89, promotes 900 watts of power and a 5-piece accessory kit. The more expensive one, at £149, is 1,200 watts and has 12 accessories.

Imagine you are shopping for a kitchen blender. You see two options. The cheaper one, at £89, promotes 900 watts of power and a 5-piece accessory kit. The more expensive one, at £149, is 1,200 watts and has 12 accessories. Which one you choose will depend on an assessment of their relative value for money. It’s not immediately apparent, though, that the more expensive option is better value. It’s slightly less than 35% more powerful but costs nearly 70% more. It does have more than twice as many plastic accessories, but what are they worth?

Now consider the two in light of a third option. This one, for £125, offers 1,000 watts and nine accessories. It enables you to make what feels like a more considered comparison. For £36 more than the cheaper option, you get four more accessories and an extra 100 watts of power. But if you spend just £24 extra, you get a further three accessories and 200 watts more power. Bargain!

That is the decoy effect in action. When it comes to in-store there are so many opportunities to employ this bias, but beware of alienating shoppers. Men in particular are likely to buy nothing rather than risk buying the wrong item.

  1. Context – When looking at the price of your brand, do so in context. Is there a competitor that is the decoy or are you perhaps the decoy for a competitor?
  2. Do the maths – Often, shoppers fail to actually work out what is the best value, and will just buy the 1 with the biggest promotional POS messaging. When designing your promotional mechanics, make sure to factor in what they physically look like to shoppers.
  3. Size matters – Shoppers see numbers in a larger font as being of higher magnitude, so be careful when deciding the relative sizes of the price, other numerical product features and even the SKU code.

Retailers have been deploying the decoy effect for a long time now. Unfortunately, when found out, the media has a field day. Work with this bias, but do so in a way that isn’t damaging for your brand.

About Phillip Adcock

My name is Phillip Adcock: I have more than 30 years of human behavioural research and analysis, and have developed a unique ability to identify what it is that makes people psychologically and physiologically 'tick'.

Would you like to know more about how shoppers and consumers think? Download my FREE guide now. Alternatively, check out www.adcocksolutions.com, where there are more FREE downloads available there. Or why not simply email me with what's on your mind?

If you think there is value in this article then please, please share it, thank you.

Phillip Adcock
Psychology & Behaviour
Change Consultant

Are you fascinated by how shoppers think?

If you’re as fascinated by how shoppers think as I am, check out my books on Amazon for more insightful, provocative and stimulating information.

More from Brainsights

How & Why Covid-19 is Transforming Supermarket Shopping

Supermarket shopping is no longer any form of relaxing experience, it has become a stressful mission that must be completed with military precision.

Read Story

How to Diet while Working From Home

10 ways to apply shopper and consumer psychology, category management and retail merchandising to your own lockdown home.

Read Story

Shopper Marketing - How to Combat New Shopper Habits

When we emerge from this current situation, shopper habits & brand loyalties will have changed and historical sales data may well come into question.

Read Story

Get the latest brainsights straight to your email box

We will never share your email address with third parties.