One of the frequently used principles is the anchoring effect, where the initially shown price becomes a reference point against which other prices are evaluated. Next to a very expensive product, a mid-priced product may suddenly seem like a good deal, even though it would not be considered cheap when evaluated separately.
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Similarly, crossed-out previous prices, bright labels, and large discount percentages work. They first attract attention and create an impression of savings, but the buyer does not always check whether the previous price was actually applied and whether the offer is truly beneficial.
9.99 Eur effect
When evaluating many prices, people often use quick comparison methods, so the transition from 9 to 10 or from 99 to 100 can seem more significant than it really is for a one-cent difference. This phenomenon is called the left-digit effect. Prices ending in 0.99 or 0.95 are often called psychological prices because their presentation can affect the buyer’s perception of the product’s price.
This method remains effective, but not because the buyer does not understand that 9.99 Eur is almost equal to 10 Eur. A study conducted by Avner Strulov-Shlain in 2023 showed that consumers perceived a price increase from 4.99 to 5.00 US dollars as if it had increased by more than 20 cents, not just one cent. In other words, a one-cent difference in the actual price can appear more than twenty times larger in the buyer’s perception.
Price endings of 0.99 or 0.95 have gradually become a signal of a lower price, promotion, or good deal, which can not only reduce the perceived price but also help justify the purchase more easily. For example, a product priced at 9.99 Eur may be perceived as not yet crossing the 10 Eur threshold, even though it is only one cent away.
Lower price – not necessarily a cheaper choice
A smaller package and a lower final price can create a strong impression of cheapness, although the price per kilogram or liter of the product is often higher. In marketing, this phenomenon is associated with the final, or absolute, price effect, where the buyer first pays attention to the final amount to be paid rather than the price per kilogram or liter.
For example, a small coffee package may cost 2.99 euros, and a large one 7.49 euros. The lower final price immediately creates an impression of a cheaper choice, although the price per kilogram of the small package may be 15–20% higher.
The lower final price reduces the so-called payment pain – the larger the amount to be paid at once, the more carefully the purchase decision is usually evaluated. Because of this, a smaller package may seem like a lower financial risk. If the product is not liked or remains unused, losing 1.50 or 2.99 euros may seem insignificant, so the decision is made faster, not always comparing the price per kilogram or liter. A small final amount can also reduce doubts and encourage a quick, unplanned choice.
When savings encourage spending more
Promotions, loyalty cards, and multi-product offers are effective sales promotion tools, but their impact cannot be expressed by a single universal percentage. Their effectiveness depends on the type of product, the presentation of the discount, the buyer’s budget, and whether the product was previously included in the shopping list. It is especially important that such offers can divert the buyer’s attention from the final amount spent to how much they supposedly save.
Offers like “2 for the price of 1” or “3 for the price of 2” change the usual buyer’s choice. They no longer decide only whether they need one product but start considering whether it is worth giving up the opportunity to get an additional unit for free.
The label “second product with 50% discount” visually highlights a large discount number, but it does not show how much the buyer will spend in total. If one product costs 4 euros, two products with a 50% discount on the second will cost 6 euros. So the total discount is actually 25%, and the buyer still spends 2 euros more than they would have spent buying one product.
Labels like “only this weekend” or “last units left” shorten the time the buyer spends making a decision. Because of this, they may compare prices less and react more strongly to the opportunity to miss an attractive offer. Limited product availability can also increase its subjective value.
Competition for the buyer
Buyer data becomes a valuable competitive advantage. Loyalty cards and mobile apps allow tracking which products a person chooses, how often they shop, the size of their shopping basket, and which promotions they respond to. Based on this data, algorithms can predict when a person is most likely to shop next and present an offer at the time when the likelihood of using it is highest.
A retail chain does not need to offer the lowest price for every product – it may be enough to maintain attractive prices for several frequently purchased and easily comparable products. Milk, butter, eggs, bananas, or bread become kind of price benchmarks by which the buyer forms an impression of the overall store price level.
Seeing attractive prices for well-known products, the buyer may check and compare prices of spices, snacks, cosmetics, or household chemicals less often. A lower margin in some product categories can be compensated by a higher margin in others.
This marketing principle is especially evident when retail chains actively compete on prices. In such cases, competition is not only for objectively lowest prices but also for the buyer’s perception of which retail chain is cheaper. Therefore, not only the actual product price but also the ability to create and maintain an image of attractive price levels becomes important.
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The buyer values not only the price but also the ease of product search, queues, and payment speed, so retailers actively compete for the buyer’s time as well. Self-service checkouts, scanning products by phone, and mobile payments help shorten shopping time, so convenience becomes an additional economic value.
How does the store influence our choices?
The store space is not planned randomly – shelf height, department location, aisle layout, and special product displays can influence the buyer’s attention, movement route, and choices. Although the buyer may think they move through the store according to a pre-planned shopping list, the environment itself determines which products they see along the way and which they pay more attention to.
A loop or so-called racetrack layout of the store directs the buyer through a larger assortment. A longer route allows noticing more products, but an overly complicated or crowded store layout can annoy the buyer and reduce the desire to browse products.
Meat, milk, eggs, and other frequently purchased products are often placed further from the entrance. To reach them, the buyer must pass through more shopping zones, so they may notice promotional offers, snacks, and special product displays along the way.
The specific location of a product on the shelf is also important. Products at eye level are noticed faster and receive more attention. In this so-called golden zone, strategically important, more profitable, or actively advertised products are often placed, while cheaper analogs may be on lower or higher shelves.
A regular buyer often moves almost automatically in the store because they already know where to find the usually purchased products. Changing the product’s location disrupts this habit – the buyer has to look around more, search for information on shelves, and at the same time notice more other products.
Another strategically important place is the area near the checkouts. Small, inexpensive, and quickly chosen products are often placed here. While waiting in line, the buyer has more time to look at them, and a low price can reduce doubts about an additional purchase.
The buyer’s choices can be influenced not only by product and department layout but also by other environmental elements. The smell of fresh bread, coffee, or spices can stimulate appetite, create a cozy impression, and remind the buyer of products they did not plan to buy.
Rules for rational shopping
To shop rationally, it is not enough to just know marketing tricks, because our decisions are influenced by attention, emotions, fatigue, available time, and various store environment factors. The most effective protection against impulsive decisions is not trying to resist them while standing by the shelf but having pre-established shopping rules.
1. A prepared shopping list and a set budget. A shopping list narrows the field of attention and reduces the need to constantly make new decisions.
2. Compare the price per kilogram, liter, or unit. The buyer first notices the total package price, so a smaller package may seem cheaper even though its price per kilogram is actually higher.
3. Evaluate the amount spent, not the size of the discount. One of the most common buyer mistakes is to consider a discount as a saving by itself. However, a product with a 50% discount allows saving only if it was really needed and would have been bought even without the promotion.
4. Avoid shopping when tired and without a clear goal. Hunger can increase cravings for food, but the statement that a hungry person always buys more is too simplified. A higher risk of unplanned purchases arises from a combination of hunger, rushing, fatigue, and unclear shopping goals, because in such circumstances a person compares products less, reacts faster to promotions, and is more influenced by the store environment.
5. A conscious pause before unnecessary purchases. Deliberately postponing the decision helps distinguish real needs from short-term emotional impulses. Although a 72-hour period is not a universal scientifically established limit, it can be a practical self-control rule that helps resist the momentary urge to buy.
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