You can do better. You deserve better.
We all know we’re being manipulated every time we shop, but it can still be unnerving to see the true extent of mind games being played on us.
That’s why I was fascinated (and mildly traumatized) to browse through a recent Reddit thread called, “What marketing tricks do we unknowingly fall for?”
While not all the respondents are experts in pricing strategy or marketing psychology, many of them experience it on the front lines as both shoppers and retail employees. While the whole Reddit post is worth a read, we pulled a few of the more notable tactics that are as insidious as they are inescapable:
1. The Instant Markdown
Why wait for a holiday sale when you can find big markdowns pretty much any day of the week? Discount retailers and Amazon have made day-one markdowns so common, they’re popping up all over.
Redditor chriz2fer sums up the tactic pretty simply: “Retail price
$139.99. Our price $49.99.”
While tantalizing as a customer, all you’re really seeing with such a strategy is how far below MSRP a retailer is willing to go while still turning a profit. As we saw with popular fashion delivery service Stitch Fix recently, retailers who offer steep discounts and source products from the same wholesalers can be a risky proposition.
In an interesting response, Redditor Superraket noted that this tactic isn’t legal in all countries. “In Denmark, you can’t advertise a ‘before’ price if it hasn’t been sold for that price in your own shop for at least two weeks,” the user wrote. “If you keep selling the product as this discounted price, then this price is considered the before price if you advertise that product again.”
This pricing strategy is often called “anchoring” because it’s an extension of the negotiation tactic in which the seller tries to set the highest amount possible as the first offer so that subsequent offers will sound generous by comparison.
2. Decoy Pricing
While not citing it by name, Redditor chrisfrat summarizes this one pretty well: “If there is a small and a large size (of popcorn, let’s say) and the small is $2 and the large is $8, most people will buy the small. However, if you add a medium at $7, most people will buy the large because they say, ‘Oh, it’s only a dollar more than the medium.'”
Welcome to decoy pricing, a tactic that boosts sales of high-profit items by creating another version of the product solely to make the pricier versions seem economical by comparison.
The easiest way to spot this trick is when your barista or cashier says something like, “Do you want to bump up to the large for just 25 cents more?”
Read more at Adweek.com.