No.27 Loss Aversion & Shopping Sustainably

No.27 Loss Aversion & Shopping Sustainably

How to make sure loss aversion doesn't negatively affect your business.

Loss aversion refers to shoppers' tendency to prefer avoiding losses to acquiring equivalent gains: it is better to not lose £5 than to find £5.

Shoppers are more responsive to price increases than to decreases. For example, from July 1981 to July 1983, a 10 percent increase in the price of eggs led to a 8% decrease in demand, whereas a 10% decrease in the price led to a 3% increase in demand (Putler, 1992).

In another study, consumers were asked to either build up a basic pizza by adding ingredients (e.g., sausage and pepperoni), or scale down from a fully loaded pizza by removing ingredients. Consistent with loss aversion, consumers in the subtractive condition ended up with pizzas that had significantly more ingredients than those in the additive condition (Levin et al., 2002).

There are numerous ways in which loss aversion can be applied to your sustainability initiatives in-store and online. This bias can make it better for the planet, your brand and better for shoppers too.

Frame your offers

‘Save’ messages of twice as appealing as ‘Extra free’ offers. Shoppers want to hang on to what they already have more than get some more. So the word ‘Save’ can be used to reference numerous aspects of environmental concern.

Focus on what’s left

When sustainability minded shoppers consider your brand, remind them of what they won’t lose, more than what they’ll gain. For example, refill packs, retain the original container and give more product whilst helping shoppers retain more of their money.

Hurry, hurry

Provide shoppers with an indication of not just how much can be gained, but also importantly, how much global resource can be ‘lost’ if they do not choose to buy it (act) now (‘only 3 left in stock’, for example).

In summary, loss aversion is an important aspect of everyday economic life. The idea suggests that people tend to stick with what they have unless there is a good reason to switch.

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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, where there are more FREE downloads available there. Or why not simply email me with what's on your mind?

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Phillip Adcock

Phillip Adcock CMRS
Psychology & Behaviour
Change Consultant

Phillips Signature

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