Ditch value battle by specializing in shopper psychology to win
Off-line retailers typically battle with the challenges of getting extra attain, particularly with the presence of e-commerce platforms that provide comfort for customers within the consolation of their houses. Nevertheless, retailers nonetheless play an essential half in the whole buying journey the place the necessity to “contact and really feel” the product is inevitable for a lot of earlier than the acquisition choice is made.
Because the proverbial saying goes — a value battle is a race to the underside. Apparently we nonetheless see many retailers resorting to decreasing costs as a lever to push gross sales. Whereas this can be efficient primarily based on easy economics from the patron’s perspective, reductions usually are not sustainable in the long term for the enterprise, if they don’t seem to be matched by a robust product worth proposition as perceived by customers.
So what are some efficient methods that may generate gross sales momentum?
Methodology 1: Utilizing incremental reductions to extend gross sales quantity
As a substitute of giving reductions instantly on each unit of a product, step-up reductions obtain the identical impact however carry with it a bigger gross sales quantity because of the impact it has on shopper psychology.
For example, a 25% low cost given on a product has the identical impact as a 50% low cost given on the second unit of the identical product. Nevertheless, the 50% would come throughout as stronger to the patron because of the following bias.
Anchor bias
- The value-conscious shopper will at all times take pleasure in large reductions and relate this to earlier buying “wins” or associated experiences. Large low cost numbers drive FOMO shopping for conduct.
Sunk-cost fallacy
- Typically, customers rationalize the necessity to stretch the acquisition to get the low cost. Since cash has already been paid for the primary unit, it might make sense to get the low cost by shopping for slightly extra. A typical conduct to justify such purchases is to offer away…
