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In recent years, pricing has become an increasingly important factor in retail. Retailers are starting to realize that they can use price to their advantage and that small changes in price can have a big impact on their business.
Price is a powerful tool that can be used to influence customer behavior. By changing prices slightly, retailers can encourage customers to buy more or less of a product. For example, if a retailer wants to increase sales of a particular product, they may lower the price slightly. This will make the product more attractive to customers and encourage them to buy it. On the other hand, if a retailer wants to discourage customers from buying a particular product, they may raise the price slightly. This will make the product less attractive and discourage customers from buying it.
Retailers should experiment with pricing to see what works best for their business.
If you want to add slight price differences in your assortment, there are a few things you can do. First, you can add a slightly higher-priced item to your collection. This will give shoppers the impression that your products are of high quality and worth the extra money. Secondly, you can add a lower-priced item to your assortment, which will make shoppers feel like they're getting a good deal. Finally, you can add a mix of both high- and low-priced items to your assortment, which will give shoppers a variety of options to choose from.
You like similar-options assortments. You get the same advantages from both options; thus, picking one doesn't cost you anything. Researchers in one study asked two groups if they wanted to buy gum. There were two alternatives for each group:
A: Same price B: Different price
It turned out that the various pricing stimulated buying. But why is that? Shouldn't pricing that is similar perform better? Surprisingly, the packets appeared to be less identical despite the exact pricing. Customers struggled to discern these packets in this setting; therefore, they looked for distinctions harder.
Slightly differing pricing, on the other hand, can lessen this desire. Customers stayed focused on commonalities, making them more inclined to pick one of the options because they would not lose any benefits.
Using competition-based pricing, you may price your things slightly cheaper, the same as your rivals, or slightly higher than your competitors. If you offered marketing automation software, for example, and your rivals' costs ranged from $19.99 to $39.99 per month, you'd set a price somewhere in the middle.
A competition-based pricing strategy utilizes the prices of rivals as a baseline. This strategy may be ideal for organizations that compete in a crowded market where a minor price difference might be the deciding factor for customers.
Are you curious about how to apply this bias in experimentation? We've got that information available for you!