Big retailers like Shoprite and Pick Pay use psychological pricing to woo you into buying products that are on special, and they always succeed in doing so.
Psychological pricing is a pricing strategy that’s designed to make customers to use their emotions, rather than rational responses to pricing messages on the shelves.
The main aim of psychological pricing is to make the consumer believe the product is cheaper than it really is. The number one reason why big supermarkets use psychological pricing is to increase sales.
Psychological pricing is mostly suited for retailers aiming toward short-term gains. The likes of Shoprite thrive on one-time sales and will do anything to close a quick deal, which makes psychological pricing strategy an effective one.
For example, let’s take a price of R499
More often than not, the way we look at the price is from left to right. The impact of the left-most digit, in this case which is 4, is the highest. This tricks you as the consumer to perceive that the price is in the R400s, and not R500.
Therefore, effectively, the psychological difference between R499 and R500 is much greater than just R1.
And that is exactly the reason why a R13.99 seems better to you as a customer than R14.00
A 99-ending price tricks your brain, when you see a price of R13.99, what your brain really see is: 14, a decimal, and some other numbers, and automatically looks for a shortcut.
The first shortcut your brain takes is to look for a small, neat number, so you’re going to gravitate toward either 13 or 14. That’s because our brain loves small, round numbers.
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