Treat Shopper Psychology as a Science

“Science will unquestionably play a larger role in determining pricing strategies in the future. In the interim, a certain amount of art and psychology remain in play.”
     Such is the conclusion of an article in the current NRF Stores magazine. A retail pricing specialist is quoted as saying “Part of pricing is psychological — it’s an art form.” The implication: What’s psychological is not scientific, but rather highly subjective.
     With this view, retailers miss profitability opportunities. For one thing, there is a never-ending stream of high-quality shopper psychology research findings to inspire specific, verified tactics. Another problem with the “psychology as fuzzy art” approach is that it too often generates a view of the shopper as addled and the goal of the retailer as exploitation. Also attributed to the retail pricing specialist is a quip that the hallmark of any good pricing strategy is the ability to confuse shoppers such that they’re not sure what the price should be.
     Sure, some of what masquerades as shopper psychology advice to retailers is junk. In giving suggestions, people with years of experience in retailing may fail to check what high-quality research finds. Our human brains are quite biased when perceiving, interpreting, and remembering experiences. The best shopper psychology advice derives from both research findings and in-store experiences.
     Treat shopper psychology as a science, and in your daily decision making, take a scientific approach:

• To what degree are you basing the decision on the outcome of a similar decision you’ve made yourself or which was made by others whose judgment you trust? Check that the degree to which you’re doing this is not more than the degree of similarity of the current situation facing you to the situation occurring with the basis decision.
• Are there more reasons to take the action or more reasons not to take it? Put somewhat more time into evaluating the side with the smaller count of reasons than the side with the larger count.
• What is the evidence that the numbers and stories you’re using to make your decision are overall averages that mask a wide range or are extremes that mask typical situations?
• Always know that “information” is not the same as raw data. Information has implications for action. It directs you toward what to do or not do. Be careful that you don’t take false comfort by bathing in lots of warm data that aren’t information.

Click below for more:
Slip in Superfluous Choices
Stamp Out Bias in Your Decision Making