On Black Friday and the psychology of prices: “Now only!” and “Only 5 per customer”

On Black Friday and the psychology of prices: “Now only!” and “Only 5 per customer”
On Black Friday and the psychology of prices: “Now only!” and “Only 5 per customer”

#The big fall and pre-Christmas shopping season is approaching. Retailers have already started the campaigns for discounts and special offers, and consumers are rubbing their hands in readiness for bargains.

Let’s look at how big companies use social psychology to increase their sales volume and make people feel especially motivated to buy things during this period. And before rushing to the shops, let’s not forget to ask ourselves the questions: Is it worth the price? How will it affect my budget?

The game with emotions

Our emotions greatly influence the financial decisions we make, including those related to purchases and consumer behavior. In the days and weeks before the big sales, we are bombarded on all channels with announcements about the irresistible discounts that are coming. It makes us pay more attention to needs and wants that we have so far suppressed because of price or because of our other budget priorities, and provokes us to fantasize about the things we could buy.

Acquiring products at discounted prices creates a pleasure that can invalidate our critical thinking and reasoning ability. Scientists even point out that with a satisfying purchase, the levels of the happiness hormone dopamine in our body increase.

Also, a markdown tag automatically sets our brains to think about how much it’s saving, not how much it’s spending or whether the product is worth the price. The consumer sees the original higher price and by default perceives the deal as advantageous, regardless of whether the reduced price is adequate and whether he will not find the product on better terms elsewhere or at another time.

The fear of missing out

Research shows that fear of missing out also plays a big role in how we make decisions. As Black Friday approaches, all the media attention and the saturation of sale ads makes us want to shop, even if we don’t have a specific need or a product on our list. That’s because everyone else seems to be out there grabbing a great deal – are we going to be the ones missing out!

“Only now!”

Special offers and flashy signs about limited offers create a feeling of anxiety and stress. The fact that there is an expiration date on offers and discounts brings a sense of urgency and blocks sober evaluation. Yes, we can live without this product, but are we really going to let the opportunity slip away?

Another way to increase sales that merchants use during Black Friday is to request that the product is in limited quantity – “Hurry before all stocks are exhausted”. This works effectively to maintain the sense of urgency and makes us act quickly so we don’t miss a deal.

“Only 5 per customer”

A similar limitation can often be seen in the pricing of products in supermarkets. The price is reduced, but there is a limit – only a certain number of items can be purchased per customer. This often leads the consumer to think of the product as something scarce, special and limited that must be acquired at all costs. And it often motivates him to buy more units than he would otherwise because of the promotional price. In other words – the trader has convinced us to buy exactly as many units as he has set as a ceiling.

The power of the crowd

A very effective trick that online stores often use is “referencing” the behavior of other users. Have you ever shopped online and while browsing the store, a notification pops up saying “500 others are currently viewing this product”? Or “You and 500 others liked this”? Or “This item has been purchased 500 times in the last 24 hours”? A common tactic to increase the fear of missing out. We read this and immediately think that we should also follow the crowd and buy the product, without really evaluating whether this claim is true.

Who doesn’t love a free lunch

One of the frequent marketing strategies to increase sales is to include free goods and services with the main product. Is there really such a thing as a free lunch? In fact, the goal is to attract paying customers who tend to spend more than planned when they feel they are getting something extra. The paradox is that often a free add-on is not something we would otherwise want to get or buy. I.e. a “free lunch” in itself is not valuable to us, but we tend to attach value to it when it is offered as a compliment.

The numbers game

9.99. We’ve all heard of the pricing trick with the magic “99” after the decimal point – and yet it still works. The power of this marketing tactic is not in the penny saved, but in the consumer’s perception of the leftmost number. We are fully aware that 9.99 is effectively 10, but our consciousness continues to register 9. In fact, in terms of user perception, the difference between 9.99 and 10 is far greater than the difference between 10 and 10.01 or between 9.99 and 9.98.

However, this is not the case when we have a reduction. When the old and new price needs to be put on the label, marketers know that the math needs to be simple and straightforward and mostly work with whole numbers. If the difference is simple to calculate, we tend to think it’s a better and bigger deal, psychologists say, pointing out, for example, that a discount from 10 to 8 activates much more consumer behavior than a discount from 10 to 7.97, for example.

Omniomania or when crazy shopping becomes a symptom

Omniomania in literal translation comes from “crazy purchases”. It means an obsessive and irresistible desire to shop without even needing the goods. Of course, everyone has experienced such a feeling, but we talk about omnimania when this overwhelming desire turns into a persistent reflex and compulsive behavior with which we fill a certain void. Such a situation can ultimately lead to disastrous financial and emotional consequences, including the destruction of relationships with those close to us.

The placebo effect of price

In 2008, INSEAD researchers engaged in the concept of neuromarketing conducted an experiment. Participants in the experiment are provided with different varieties and wine cellars for tasting – all at different prices from very expensive to very cheap. The task is to rate the drink. The study looked not only at the rating given, but also at how the brain and pleasure centers responded to the proposed drink. The more expensive wine gets the highest ratings and the strongest brain activity response.

In fact, this is the play presented to the participants. And the truth in the experiment is that the offered wines are of exchanged prices, with the higher class being presented for a cheaper wine and vice versa. The researchers conducted several more similar experiments, which again confirmed their hypothesis – about the placebo effect of price, which makes us perceive something as more valuable and expensive, just because it has a higher advertised price.

The placebo effect also carries over to reductions. We tend to automatically see something as a bargain just because an initial higher and ongoing lower price is indicated, regardless of how that product is offered in a normal non-promotional situation.

To avoid holiday shopping anxiety and stick to smart purchases, here are some simple tips we can follow:

  • Create a preliminary budget that fits your financial capabilities. That way, you’ll have peace of mind that even if you stumble into unplanned purchases, the spending ceiling will keep you in the “green” zone.
  • Create a shopping list and stick to it. Don’t shop aimlessly. With the discounts, we can save if we take more advantageously products that we have a plan and need to buy anyway. Impulse purchases that we make simply because they are on sale actually take a resource out of our budget.
  • Shop with people who would be your conscience and reason. Don’t shop when you’re feeling negative emotions.
  • Don’t confuse your savings and emergency fund. Whatever budget you plan, don’t be tempted to take a resource from the family’s emergency funds.

Check the possibility of returns – it often happens that we regret impulse purchases the very next day. See also: When can we return or exchange a purchased product?

The article is in bulgaria

Tags: Black Friday psychology prices customer


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