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I am working on a new app that list a lot of great deals and I was wondering what have the greater impact on user between the price and the discount.

In other words : Are users looking for a low price or an opportunity ?

mockup

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    @Wander I think you're probably referencing JCPenneys. Former Apple retail store head honcho took over as CEO there and tried to rebrand it and take focus off discounts and just always give good prices and their customer base revolted. – Brian Behrend Jan 28 '15 at 15:01
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    My grandmother once saw coffee cups on sale 3 for a dollar, and had to buy some because otherwise they were a quarter a piece. The bigger question is why she felt compelled to buy more coffee cups, but the answer was literally "because they're on sale". I'd like to say this was just an "oh, grandma..." moment, but honestly this is how the average consumer thinks (even if they usually notice when the sale is worse than the original price... – corsiKa Jan 28 '15 at 22:58
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    This isn't really a question about User Experience, but about marketing. Marketing department should decide what should be more visible to the user, and User Experience should decide how to make it more visible. – gnasher729 Jan 29 '15 at 11:44
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    Surely your app will have the option to sort by either price or discount. You should highlight differently depending on which sorting mode is being used. – Jack M Jan 29 '15 at 15:44
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    My wife accidentally started a furniture store (don't get me started) but she encountered the same thing: A $4000 sofa did not sell as good, so make it $5000 and 20% off, boom. – corsiKa Jan 30 '15 at 14:06

13 Answers 13

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There is no universal answer to this question, as which is a more important factor in a buying decision varies depending on: price; type of user; perceived quality; and type of purchase.

Price

In general price matters more for lower valued items and discount matters more for higher valued items

Type of user

Based on A/B testing and discussions with other professionals, in general women tend to be more interested in the discount, and men more interested in the absolute price. It's why women's clothing stores tend to always have items on discount, and where the discount is the most visible marker. Of course there are other factors that come into play, this is just one of them.

Another is the wealth of the user. Typically poorer people will focus on the absolute price more than the discount, as their shopping is more utilitarian in nature. E.g. in the Netherlands if you want to buy beer, there is the Euroshopper beer which is about €0.30 for 450ml on one end of the scale, and craft Belgian beers at about €3.00 each sold next to each other. As people in the Netherlands have more disposable income, and are less price sensitive, they tend to buy towards the middle of the beer price scale. Whereas in places like South Africa, the price difference between common beers in a supermarket is far less and people tend to buy whatever is cheapest.

Perceived quality

If the item is perceived as having a high quality, and something that is likely to only be bought once or a few times in a lifetime, the discount tends to matter more. You can often see this logic with men buying tools, or sound systems. I'm sure a similar thing would apply to women and high end handbags or shoes, but I thankfully have no experience with this.

Type of purchase

With impulse buys, the discount tends to be more important, as it's what's used as justification for the purchase. This also applies to pressure situations where people don't want to lose out on an "opportunity". It's a common negotiating tactic to give a good discount, but limit it in time to create pressure. You'll often see car salesmen do this sort of thing.

Whereas a purchase where someone takes the time to research it and make their decision carefully, the final price is more significant.


So overall, you'd have to make an informed decision based on what you know about your audience and product. I would strongly suggest A/B testing to be sure, and if possible combined with some sort of user demographics.

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    I'd also suggest that for "Impulse buys" the discount is more important. The "I like that, and oh would you look at the deal on it!" factor. For more general costs, the price is likely the greater consideration. – Jon Story Jan 28 '15 at 14:24
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    Do you have any figures / studies to back up the claim relating to women being more interested in discounts? – The Forest And The Trees Jan 28 '15 at 16:02
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    @TheForestAndTheTrees In this case I was basing it on internal A/B testing in a large multinational over a sample set of about 50k. I don't have any academic studies to support that claim though. – JohnGB Jan 28 '15 at 16:20
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    @TheForestAndTheTrees The failure of J.C. Penney's Everyday Pricing strategy is clear evidence of this. The store briefly experimented with focusing on price vs. discounts (and even displayed discounts with reference to the item's usual price instead of an inflated MSRP). The stock took huge hits, and the old discount focused system came back soon after. thefiscaltimes.com/Columns/2013/03/04/… en.wikipedia.org/wiki/… – Shadow503 Jan 28 '15 at 18:27
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    +1 for justification. People definitely need to be able to justify the buy (either to themselves...or their partner). Also, loved the Belgian beer reference. – Vince Caregnato Jan 30 '15 at 12:42
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I took a course on Coursera. Beginners Guide to Irrational Behavior by Dan Ariely. The course addressed these kind of issues. As you would guess, people are irrational.

Lets say a customer is buying a pen for $20 and you say to them, "The store down the road has the exact same pen for $10". They would be more likely to consider that a deal worth exploring and make the effort to go to that store and buy the pen there.

If the exact same person were buying a $800 television and you told them the same thing. "The store down the road is selling that TV at $790", they would see the same saving in a different light and not bother to save $10. The discount on the TV is perceived as less significant even though the amount is the same.

To answer your question: I believe the discount compared to the price is the draw. Naturally, this kind of experimentation would best be conducted in highly controlled experiments since its a direct effect on the bottom line.

I can't find his specific study, but here is a list of his research. Good nerd reading.

http://danariely.com/the-research/

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    I think this example shows how percentages are perceived as better than absolute values. A 1.25% savings is perceived as less significant than a 50% savings, even though they have the same absolute value. IN fact, you could even say that were the TV discount $20 or $30, most people still wouldn't take it. What percentage do you think is the psychological threshold for when nearly everyone would choose to take the discount than not? – phyrfox Jan 29 '15 at 17:21
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    "they would see the same saving in a different light and not bother to save $10" - that is interesting, though I wouldn't necessarily call it "irrational". On the one hand, for small (and expendable) items like a pen, buying several when they're discounted is a realistic option, so that discount multiplies, whereas even at a significant discount, one is less likely to buy ahead large items such as a tv set that one expects to use for some years (even if one has the storage space and money, it will be dated by the time the first one is broken). ... – O. R. Mapper Jan 29 '15 at 19:46
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    ... On the other hand, isn't much saving done at least in part because of what customers think vendors deserve, rather than because of the own financial gain? As such, a tv set producer getting a small percentage more than the apparent minimum price is perceived as acceptable, but a pen producer getting twice as much as what the product seems to cost is rather perceived as fraudulent. – O. R. Mapper Jan 29 '15 at 19:53
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    What you hint on is the magic "20%". Discounts need to be at least 20% or consumers generally don't care too much. @phyrfox – fredsbend Jan 30 '15 at 6:38
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    My brother sold cars for a living at one point. He told me his goal was to have both parties walking away thinking they got a good deal.That is the core strategy going on everywhere. The push and pull between buyer and seller. In this case, the irrational behavior is prompted by what is the turning point where the consumer thinks they are getting a "steal". And marketers intentionally display discounts as just that for consumers. there is no magic number, just a tipping point. – Itumac Jan 30 '15 at 16:20
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I agree with others that there are just too many variables (a good portion were exposed) to make a decision without A/B testing.

btw, I think the image of the OP seems to be reducing the chances to a false dichotomy where one or the other (price or discount) must be the one "highlighted" in the final design, when in deed they could both have their distinctive place and presence in a balanced way, with the chance of getting the "attention benefits" for both the customers who are discount or final price seekers.

Here just an fast example to illustrate the idea of the last paragraph.

mockup

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    either way, you need a minus sign before that 30%. or write 30% off!! – Level River St Jan 30 '15 at 6:27
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    @steveverrill You're right, the thing is I had not found a nice way (just according to my taste) of showing that because I doubt of the user positive reception of a minus symbol at a cognitive level, and the length of "OFF" would need a extension of the "discount control", and even doing that it would stole some attention to the number (which really matters). Anyway it seems that my brain just couldn't handle the incompleteness of the design (even more after your comment) and figured out just to put off vertically xD. So thanks for pointing it out. – Alejandro Veltri Jan 30 '15 at 16:44
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I don't think there's a perfect answer here but I know I lean towards Option A.

  • People already know where to look for the price. You've trained them to look in one spot for a price so it's easy for them to find, they don't need an extra highlight to spot it.
  • The discount is what sets this item apart from the others. Every product on this store has a price. Having a price is not unique. In fact, the price not even be better than a competitor's store so highlighting it specifically may not be a positive.
  • You don't want to teach your users to focus too much on price. It is common for a store to sell a couple similar products of varying features or quality. For example, Product X may be more expensive than Product Y but it is also of better quality and is currently on sale then you want the user to know that.
  • In my opinion, Option A just looks better. It is visually more appealing and Option B feels uneven with too much happening on the left side.

Obviously every store is different so not all these apply in every scenario.

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Marketing Answer: The discount is most important!

UX Answer: The actual price is most important!

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You could do some A/B testing to determine which approach is best but, as some other answers suggest, there may be no one size fits all solution.

If you could start by randomly varying which number is given prominence and track how individual customers respond to this (i.e. are they clicking on more products with big discounts, or going for lower prices), you could build up a profile and personalize what users see based on what they are more interested in / respond better to.

You could also try explicitly allowing users to filter products on the magnitude of the discount as well as price.

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It depends on your price bracket and customer type.

If the product is already cheap (like a 50p pencil down 10% to 45p), then the price is more important.

If the product is expensive, or an investment purchase (like a £1500 handbag down 10% to £1350), then the discount is more important than the price.

The other thing to bear in mind is that some customer bases are highly discount sensitive (for example traffic to a bargain hunter site), meanwhile some customer bases really aren't (for example traffic to a site selling luxury holidays to billionaires).

You'll need to factor in your audience and product type into your UX decisions.

In your case, because it's an app catering to "deal shoppers", you'll probably do better emphasising the price when the price is objectively low, and emphasising the discount when the price is high. Your actual decision will be based on the average price of your products.

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There are many factors that go into marketing a product for sale. A key factor is the environment the buyer is operating in. If I am physically in a store and I see an item with a steep discount it may trigger an impulse buy, so discount might be the most important factor.

However, that is not your environment. A user willing and able to run your app to see this item, is very likely willing and able to check this item at other retailers, through your app or another. At that point, I believe they are going to care more about the bottom line price/value and not the discount.

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Depends

There are 3 Type of buyer in World, One, Who want good quality product who never compromise with price for good product, Second are who find products that may comes handy in their budgets. So some time they compromise with product quality. And Third type are who, want product for their fond of and change that product frequently. So they found low price and of course with discount product.

And Yes, Discount is effect on all those type of buyers, So you need to display it wisely. If discounts' label are every where in your project, then it may negatively affect on your project.

Think like buyer, If you visit ecommerce website, and show offers every where than what you think?

There are two possibilities there.

  1. You like that if you are 2nd and 3rd type of buyer
  2. If you are professional, like 1st type of buyer, then you think that they give discount on many products then other, does they deliver good products?

Display discount is good but its depend that how you manage it in your UI.

You can set sorting like others that sort by price, discount etc...

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I agree with one of the comments - if you can set your max visibility item to be the thing they sorted or searched by then you have the best of all possible worlds.

Making the things visually different is good, too - have one in bold, another in a larger font, so that they all stand out, and their eyes - or rather, their mental filter of "what I'm searching for" can most quickly gravitate to the things they most want to see.

When someone's shopping, they're in hunter/gatherer mode, searching for those ripe fruit, or that twitch of movement that gets them their prey. You just want to make it easy for them to hunt.

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If people were rational, they would disregard the discount and look only at the final price. But people aren't rational. Retailers have figured out that if store A advertises a product for $20, and store B advertises the same product as "regularly $40, today only 25% off", people will buy from store B to get the big discount, even though the final price is higher than store A. I don't have citations to any studies on this handy but I've seen them, and you need only look at store displays to see that many, many stores follow this strategy.

The store where I usually buy clothes always has everything on sale. Absolutely nothing is sold at a regular price, everything is always "50% off!". 50% off what? I presume 50% off double the price that they sell it for every day.

Absolutely true story: Once my wife told me that she was going shopping that day and had seen a sale on men's dress shirts and would I like her to pick me up a couple? I said sure. When I got home she had bought me two shirts. I tried them on and, unfortunately, they didn't fit. So I said to her, "Oh, didn't you know my size?" "Yes", she replied, "But the ones in your size weren't on sale."

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There's a whole field of academic study called "Behavioural Economics" which researches how real people actually make 'economic' decisions.

This book contains examples which relate:

Predictably Irrational: The Hidden Forces That Shape Our Decisions is a 2008 book by Dan Ariely, in which he challenges readers' assumptions about making decisions based on rational thought.

There are handy chapter summaries on the Wiki Link,

Chapter 2: "The Fallacy of Supply and Demand" relates to the question

When consumers buy a product at a certain price, they become "anchored" to that price, i.e. they associate the initial price with the same product over a period of time. An anchor price of a certain object, say a plasma television, will affect the way they perceive the value of all plasma televisions hence forth. Other prices will seem low or high in relation to the original anchor. In other words, decisions about future LCD television purchases become coherent after an initial price has been established in the consumer's mind

PS Edited in response to comment- I will try to find the book and actually quote from it rather than Wikipedia !

  • This doesn't really answer the question on its own though; it's just a link off elsewhere. Can you summarize the relevant parts? – JonW Feb 2 '15 at 10:26
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I am also working on a similar site. What came out from customers is that difference from initial price to the "offer" price is the most important. Problem is that if the initial price is low eg. initial price is 3$, then the difference will be very low even when the percentage is high. To sum up best practise is to empasize on price when the difference is meaningful to the customer and to percentage when price difference is low. This can be set by adding some if cases, but lacks consistency and depends on your opinion to decide which price difference is meaningful.

Another way to handle this issue is to add discount percentage as a ribbon on image. This will keep consistency and will be easily seen by all visitors.

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