Today, I came across a very interesting topic from Etsy forums. It’s actually my favorite topic! It’s about the psychology of pricing and brand value.
What a better way to price your items than following a study that is already tested and approved by experts.
Christopher Lee from NerdyPugStudios is doing a graduate class this summer, and by the first week of July they were doing an overview of ecommerce, and he said the class became more interesting when the psychology of pricing and consumer perceived brand value became the topic of discussion.
The interesting discussion explored mainly the psychology of pricing and brand value and I felt the need to share this to my readers.
According to Lee, “$25.00 vs $24.99: Consumers are more likely to purchase products ending in a non-rounded number, e.g. $19.99. The psychological shift that occurs from the $0.01 drop in price is significant enough that some online stores have reported as much as a 25% increase in sales after converting from nice rounded numbers to those ending in 9s. Apple, for instance, lists all products endings in 9s.”
Well, I agree to that. If you would notice, popular brands usually end their prices in 0s or 5s, but the psychological weight of prestige branding pricing doesn’t generally carry over well into online marketplaces such as Etsy, Amazon, or eBay, especially when consumers are just browsing thousands of products from a few search terms.
If you find this topic interesting, you are able to have a glimpse of ongoing research into online consumer behavior at Google Books. You just need to enter the keywords “Ecommerce Pricing” and “ecommerce psychology” bring up some great reads.
To learn more about the psychology of pricing, you can check this infographic from Hubspot below:
So what do you think about the study? Will you apply this to your products’ prices? Please let us know in the comments.