How Much? Effectiveness of Strikethrough and Other Techniques in Different Market Verticals
October 5, 2017 14:00
When to BOGOF and when not to BOGOF
Do the price slogans “buy one get one free”, “prices slashed by 50%”, “best price offer”, and strikethrough pricing (e.g., “$32 New Price: €28.84”) and so on work? Do they actually increase the chances that a consumer will make a purchase? Are they ‘smart offers’?
Everyone seems to love a bargain. The idea of buying to reduce spending seems contradictory, yet it is the basis of most price offers. You may buy A over than B, simply because the only difference is that you get 2 x A for the price of a B. Or, you choose A because it was
€35 and is now just
€12 so you stand to save money (i.e.,
€13). However, you may not have been considering buying A or B in the first place, but the comparison you made between two brands or an old versus new price has caught your interest, leading to the conclusion that buying will save you money. Price offers, such as “buy one get one free” may work well in a supermarket for certain products but may not work well in other retail categories, such as clothing. Knowing which kinds of price slogans and techniques work in which product vertical and why they work would obviously provide a retailer with significant advantages.
Dr. Eamon Fulcher addressed this problem by obtaining consumer evaluations of different price offers in a range of different verticals, using implicit reaction time technology. This enabled him to tap subconscious perceptions of a range of different types of pricing offers, since we suspected that asking explicitly would be likely to produce demand effects. He will present the results that clearly show that consumers do make strong discriminations at the subconscious level and suggest that some pricing offers do indeed work well in some retail contexts but less well in others.
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