Price Anchor Definition
A price anchor is a reference point that consumers use to base their decisions on. It can be an advertised special, sale price, or regular price. Price anchors are often used by retailers to influence shoppers into thinking that they are getting a good deal, when in reality they may not be. Studies have shown that people are more likely to make a purchase when they believe they are getting a good deal, even if the savings is minimal. This is because our brains tend to focus on the relative savings rather than the absolute savings. For example, if you see a shirt that is regularly priced at $50 and is on sale for $40, you will think that you are saving $10. However, if you see the same shirt priced at $100 and on sale for $90, you will think that you are only saving $10, even though it is the same percentage off. This shows how price anchors can influence our perception of value and ultimately our purchasing decisions.
