Double 11, Double 12, Double Dan...... In addition to waves of full reduction activities, now, merchants are also making great efforts to roll up the price: 9.9 laundry detergent, 19.9 snack gift package, 29.9 annual membership, people can't help but "chop their hands" and buy crazy more.
But many people will find out when they check out that these seemingly inexpensive items add up to far more than their budget.
Image source: Weibo screenshot
In fact, the fundamental problem lies in the surprisingly uniform pricing of these products – the number 9 after the decimal point.
What's the magic of this little 0.9?
How attractive is 0.9?
It's normal to step into the trap of $0.9, after all, people have fallen into countless rounds more than 100 years ago.
In 1880, Macy's advertised in newspapers that its $0.99 and $1.99 merchandise were "the best deals ever."
It's hard to say whether it's a good deal or not, but this marketing effect is really good. After changing the price of the product to end in 9, Macy's sales increased significantly, and other merchants followed suit, starting a pricing trend of 0.9 yuan, which has been affected to this day.
There are people who don't believe in evil and want to break this convention.
In 2011, Ron Apple's senior vice president moved to Jesse Penny, the largest department store chain in the United States, and he believed that consumers should not be confused by all kinds of propaganda words, but should respect their right to know and show the most authentic price of goods.
As a result, not long after taking office, Ron successively implemented a series of commercial measures in hundreds of his shopping malls. One of the changes is to remove the end of 0.99 from the price of the commodity and replace it with a whole number. For example, a dress that was originally priced at $29.99 will be reversed to $30.
At first glance, it was an extra 1 cent, but the expected effect was greatly reduced, and his series of measures reduced total sales by 30%.
Why are people keen on 0.9 goods?
In consumerism, this is known as the "left-hand digital effect".
Neal Kahneman, a former Nobel laureate in economics, believes that the first signal received affects the cognitive judgment of the brain, and the smaller the first number, the smaller the prediction of the final outcome, and vice versa.
In most countries, the text is written and read from left to right, which means that when we see the price of a commodity, we first see the number before the decimal point. Although the difference between 1.99 yuan and 2 yuan is only 1 cent, we have the impression that they have probably been grouped into two different price brackets.
In one report, the researchers divided the test subjects into different groups, with the two pens priced at 2.00 yuan and 2.99 yuan respectively in the former group, and 1.99 yuan and 3.00 yuan in the latter group, which only increased the price difference between the two pens by 2 cents.
But the effect is striking, with only 56% of people choosing a pen in the former group, and 82% in the latter group.
This is the impact of the first visual effect on people's consumption Xi. The former set of pricing, which all starts with 2, seems to make little difference, while the latter set of pricing, the number before the decimal point is much worse.
I believe that when many readers see the above two sets of numbers, their first reaction may also be that the former group is less than 1 yuan short, and the latter group, the difference becomes nearly 2 yuan. But in reality, their spreads haven't changed much.
Is a 0.9 product necessarily a good deal?
Some readers may think that a penny is not money, and buying 0.99 must be more cost-effective than integers. In fact, this is again falling into the trap of merchants.
In 2021, the Journal of the Association for Consumer Research published a report in which researchers compared 98 million pieces of data from major supermarket chains in the United States and found that items that ended in 9 were 18% more expensive than those that did not.
Robert, a professor of marketing at Rutgers University, believes it's a "99 meaning paradox."
When merchants are doing promotional activities, in order to create an association of "this is already the lowest price, after all, even the penny has to be taken care of", the price of some promotional products is deliberately set at the end of 9.
At first, the price of these promotional products was indeed low compared with the same product, but when consumers saw more promotions and linked "9" to the concept of promotion, merchants began their plan: continuous price increases.
For example, for the same product, one keeps the original price of 18 yuan, and the other price rises from 16.9 yuan to 19.9 yuan, the latter is much more expensive than the former, but out of inertia, consumers will acquiesce, 18 yuan may not have high performance, and 19.9 yuan is the lowest price in the same performance, after all, it is 9 ends.
Under the influence of the first visual effect, consumers will not have time to think that 0.99 yuan and 1 yuan are only 1 cent apart, and the 1.99 yuan product and 2.99 yuan of goods add up to not more than 3 yuan, but close to 5 yuan.
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What other strange routines do merchants have?
Today's e-commerce shopping festivals are always one after another, and gimmicks are endless, and those activities that seem to be able to pick up cheap may actually make you suffer a big loss.
For example, from small bubble tea shops to large high-tech manufacturers, they will follow the "multi-option" routine.
For the same milk tea, the content of the medium cup and the large cup is almost doubled, but the price is not too much, and on average, it seems that the large cup is more cost-effective.
If you think about it this way, you have already been caught up in a cognitive bias called the "bait effect". Merchants often offer less appealing extras to make you pay more than you expected by buying their flagship products at a higher price.
For example, a brand of mobile phone, the basic version is 5999 yuan, and the intermediate configuration has more 64G memory, which is larger than the basic version, which is very suitable for playing games and watching videos, but the price is only 1000 yuan more, and the advanced configuration is even more powerful, not only improving the camera function, but also increasing the screen refresh rate, and the price is also 1000 yuan higher than the former.
I believe that many people will experience the following psychology in comparison: it is only 1,000 yuan higher than the basic version, but there are so many more functions, it is better to buy the intermediate configuration; but the advanced configuration has so many functions, it is better to add another 1,000. Add and add, and you will be added directly to the highest level.
In fact, this kind of "come and come" consumption psychology just makes you fall into the hands of merchants, while thinking that you can find affordable and good things, you forget that what you need at the beginning is actually only a basic version of the mobile phone, those extra functions, may not be what you need, and those that exceed the budget, in fact, are unnecessary consumption, can also be said to be a waste.
bibliography
[1] Kenneth C. Manning & David E. Sprott, 2009. "Price Endings, Left-Digit Effects, and Choice," Journal of Consumer Research, Oxford University Press, vol. 36(2), pages 328-335.
[2] Avichai Snir, Daniel Levy. (2021). If you think 9-ending prices are low, think again. Journal of the Association for Consumer Research,33-47.
[3] Thomas, M., & Morwitz, V. (2005). Penny wise and pound foolish: the left-digit effect in price cognition. Journal of Consumer Research, 32(1), 54-64.
[4] Lessons in Pricing Strategy from JCPenney retrieve from https://mmrstrategy.com/lessons-in-pricing-strategy-from-jcpenney/
[5] The 5 Big Mistakes That Led to Ron Johnson’s Ouster at JC Penney retrieve from https://business.time.com/2013/04/09/the-5-big-mistakes-that-led-to-ron-johnsons-ouster-at-jc-penney/
[6] The trick that makes you overspend retriever from https://www.bbc.com/worklife/article/20190801-the-trick-that-makes-you-overspend
[7] The Business of Choice: Marketing to Consumers' Instincts
Planning and production
This article is a work of popular science China-Star Project
Produced by the Department of Science and Technology of the China Association for Science and Technology
Producer: China Science and Technology Press Co., Ltd., Beijing Zhongke Galaxy Culture Media Co., Ltd
Author丨Li Mi is a popular science creator
Review丨Fan Chunlei is an associate researcher at the Institute of Psychology, Chinese Academy of Sciences
Planning丨Yang Yaping