I was in JC Penney the other day, doing a little shopping as well as some analysis of their makeover efforts. For those who weren’t aware, the company brought in Ron Johnson from Apple last fall to redesign the retail experience for its shoppers. Since then the reception of the efforts has been lukewarm, however I think it is too early to tell what the eventual result will be. Rome wasn’t built in a day, and reinvigorating a struggling brand doesn’t happen fast either.
Part of this makeover is a new pricing strategy which is getting some criticism. But what caught my eye was actually the new price signage the company had rolled out. Gone were signs with dollar signs and prices ending in .99 and in their place were colorful, yet discreet signs with whole numbers that at first glance would not be thought of as prices.
This type of price signing is growing in popularity and has neuroscience research to back it up. In an article of Neuromarketing, we see that there is research to support that simply removing the dollar symbol from a price sign can affect the buying behavior of consumers. That’s why a growing number of restaurants do like JC Penney and only use whole numbers on their menus. It’s been shown that we put less of focus on the “money” aspect of purchases when the dollar sign is removed and we tend to spend more than we otherwise would have.
This article also suggests that the way a price is worded in our brain can affect our reaction to the actual price and whether we will have sticker shock. The research suggests that for example, a price that is signed $1,659.00 would be processed in our head as “One thousand, six hundred and fifty-nine dollars and zero cents.” That same price shown as $1659 or even better just 1659 would be processed as “Sixteen fifty-nine,” a simpler and possibly less daunting number for a shopper.
As with any research involving cognition and behavior, there is much more to learn and these findings could be proven false. But for now, when you are trying to create the most positive and relaxing shopping experience for your customers, removing some anxiety in the buyer’s minds can’t possibly be a bad thing.