The Psychology Of Price: Stop The Markdown Madness
||National Retail Federation
||Jan 18, 2012
Presentation at the NRF 2012 Retail’s Big Show in New York City, NY.
Price is just a number and yet consumers obsess over it: the lower, the better! And what do retailers do? They obsess over prices just as much and they keep slashing them in a race to the bottom.
There are important psychological reasons for human beings’ low price lust such as, loss aversion (loss of money), thrill of the deal, anchoring effects and many others that we are uncovering in this presentation. And there are equally important business reasons for retailers’ not to embrace these strategies as their sole path to their customer’s wallet, and we are disclosing them in this presentation too.
Most importantly, we are offering alternatives to the low price strategy. Naperville Running Company of Naperville, Illinois has been consistently increasing its revenue even in the middle of the recent recession thanks to its strategy that uses sales and deals very sparingly because they "do not want to ‘condition’ their customer to think in those terms." What they want to ‘condition’ their customers to is the secret to their success. A secret you are about to learn.
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