In today’s economic climate, consumer spending can be a tricky trend to forecast. Recently I learned that there are psychologists who specifically study consumer mind sight and are paid boocko bucks to tell retailers things like ending prices in 9, 99 or 95 sets off some sort of “good deal” alert in our head. Evidently we’ve been primed subconsciously and its believed specific formatting in prices sways our willingness to buy.

Since we all process numbers differently, its tough to nail down exactly what goes into consumer reasoning when making a purchase.  Rather than focusing on specifics, researchers say its all about perception.  How we PRECEIVE a price can set off a few “triggers” that have been studied and proven to produce sales.

Some of the perceptions believed to trigger our need to shop till we drop include:
1. Savings perception: Ending prices in 9’s and 5’s are looked at more favorably by consumers
2. Value perception: If a consumer thinks they are getting something free or some sort of bonus with a purchase, they are more likely to buy. The BOGO’s or X% more free deals fall into this category.
3. Discount perception: Considered to be one of the more alluring triggers because of perception of a good value for the money, % discounts fall into this trigger.
4. Unbundling perception: Probably the most deceptive trigger, the perception here is that we are more likely to buy if a price is “unbundled” or spread out into routine payments. Studies suggest that when faced with the exact same price for the exact same product, we are more likely to buy if the price is divided up. The typical insurance policy billing is an example here. Rather than charging $1,200 every year for insurance, there is a $100 a month charge, which seems more reasonable to a buyer.

Pricing can be a complex subject. Retailers need to sell to make a profit while pricing merchandise attractively. I knew price tag numbers weren’t random, but who would have thought that psychologists are involved?