Specify Odd-Ending for Conspicuous

There are exceptions to exceptions. A general principle is to set prices at $499 instead of $500, for instance, since the 99-ending leads consumers to perceive the cost to be noticeably less. One explanation is that shoppers devote higher attention to the left-most digit—in this case 4 versus 5—over the right-most digits. Another explanation has been that people who want to buy an item look for evidence that it’s at a good price, and the $1 drop provides a comforting argument for that.
     Based on my own experience in retailing, I’ve said that an exception to the rule is with luxury items, since a 99-ending would signal bargain over quality. The exceptions to this exception, according to studies at TBS Business School, ESCP, and Université PSL, occur if the luxury items are conspicuous to others when used by the purchaser. People who want to show off their status are more likely to be attracted by a slight cut in the price than are those principally motivated to indulge themselves with the superb quality of luxury items.
     To test their reasoning, the researchers obtained survey responses from 169 women who had bought luxury items during the past two years. The logic for asking only women is that they are responsible for about 80% of all luxury purchases. The respondents were asked to express purchase preferences among luxury handbags in which sets of odd-ending and even-ending prices were randomly assigned by the researchers.
     The survey responses supported the researchers’ perspective about odd-ending prices’ attractiveness to those looking for status and even-ending ones’ attractiveness to those seeking quality materials and construction.
     Another angle from which to assess the hypotheses was tabulating the frequency with which marketers of luxury items, namely Gucci and Louis Vuitton, use the two types of pricing. In the researchers’ sampling on French websites, with prices in euros, odd-ending prices were significantly more frequent for items in which a logo was prominent, consistent with the idea that the purchaser was seeking a demonstration of status.
     These findings mesh well with prior research showing how about 20% of sunglasses selling for under $50 included a brand name or logo easily visible to others, about 85% when the retail price was between $100 and $300, but for sunglasses selling above the $500 mark, the percentage dropped dramatically to about 30%. Who needs to show off when what you’re principally seeking is the indulgence of luxury?

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Roll Those Price Quote Wheels-Within-Wheels 

Expect Exceptions to 99-Ending Pricing 

Slow Down to Show Off