The end of the 99p bargain is much trumpeted in the marketing media. Poundland is a roaring success and large retailers such as Superdrug and Tesco are launching their own £1 ranges.
Was there ever a golden era when the British public thought that a £299.99 sofa was actually closer to £200 than £300? Of course not, but the psychological tipping point of the 99p/100p was greater when the penny was worth more.ing
Today the psychological tipping point will be somewhere else. A lot of promotional prices are ending in 45 because £245 is indeed closer to £200 than £300. Get your pricing right in retail is the balance between making that extra 50 on each sale or shifting more units.
Pricing for ecommerce is harder because your products are in the same place (the customer’s browser) as the competition. Some low cost products have ridiculously weighted postage and packing costs but they win on the price comparison services. Find the sweet spot where your product is price competitively and you’re still leveraging the psychological advantage.