Pricing Psychology
Myth:Charm pricing (.99) reliably boosts sales.
Evidence:Nine-ending prices produce measurable demand lifts in field experiments, but the effect is modest and can invert for premium positioning.
Effect is context-dependent: luxury and B2B categories often see round numbers perform better.
Anderson & Simester, Quantitative Marketing and Economics · 2003 · Academic
Channels: ecommerce · pricing
Pricing Psychology
Myth:A percentage discount converts better than free shipping.
Evidence:Shipping cost is the single most cited reason for abandonment; a free-shipping threshold typically outperforms an equivalent-margin discount and lifts average order value.
Pricing Psychology
Myth:A cent is a rounding error.
Evidence:Consumers encode prices left to right, so $2.99 vs $3.00 shifts demand far more than one cent warrants - the left-digit effect, shown across lab and field evidence (Thomas & Morwitz, JCR 2005).
The Validity Gap
Myth:A big enough A/B test or attribution platform can pin down each campaign's ROI.
Evidence:Across 25 large field experiments with major U.S. retailers and brokerages, the median confidence interval on ad ROI was over 100 percentage points wide; individual-level sales are so volatile (coefficient of variation ~10) that an informative test often needs 10M+ person-weeks.
Checkout
Myth:Long checkouts are fine if the product is good.
Evidence:Average large-site checkouts ask for far more fields than necessary; trimming to the minimum viable set is one of the highest-yield conversion changes available.
The Validity Gap
Myth:Display ad ROI shows up in online conversions.
Evidence:A randomized experiment with 1.6 million Yahoo! users found display ads profitably lifted a major retailer's purchases by 5% - but 93% of the increase happened in brick-and-mortar stores, and 78% came from customers who never clicked the ads.
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