Have you ever walked into a store, spotted a huge discount, and thought, “Wow, what a deal!”? Or maybe you’ve been torn between buying a mid-tier product because the premium one seemed ridiculously overpriced? If so, you’ve experienced the anchoring, a clever psychological trick that shapes how we see value.
In this blog, we’ll break down anchoring, show you how it affects your everyday decisions, and share easy ways to outsmart it. By the end, you’ll shop smarter, dodge pricing traps, and feel great about your purchases.
What Is Anchoring? Let’s Break It Down
Anchoring is when the first price, number, or piece of information you see—the “anchor”—influences how you judge everything else. It’s not just about shopping; it shows up in negotiations, financial decisions, and even social settings.
Imagine you’re shopping for a jacket. The first one you see is priced at $200. Then you spot another for $100. That $100 jacket suddenly feels like a bargain—even if it’s more than you planned to spend. That $200 price tag? It’s the anchor.
How Retailers Use Anchoring to Their Advantage
Retailers are pros at using anchoring to guide your choices. Here’s how they do it:
1. High Starting Prices
You’ve seen it: “Was $100, Now $50!” That $50 seems like a steal compared to $100, even if the product’s true value is only $30. Anchoring makes the deal irresistible.
2. Premium Options
Think of subscription plans labelled “Basic,” “Standard,” and “Premium.” The Premium plan is usually priced sky-high to make the Standard plan look like the best bang for your buck.
3. Bundles and Deals
A single product priced at $20 might feel pricey until you see a “Buy 3 for $50” deal. The anchor here shifts your perception of value.
Everyday Anchoring Tricks You’ve Probably Seen
Here’s where anchoring might already be affecting you:
- Flash Sales: Ever noticed those outlet stores with “Original price” tags crossed out? Anchors make discounts seem bigger than they are.
- Menus at Restaurants: That $50 steak? It’s there to make the $30 pasta seem like a bargain.
- Online Shopping: Retailers love showing you the “original” price next to a discount to create a sense of value.
Why Does Anchoring Work? The Science Behind It
Our brains are wired to cling to the first number we see and adjust from there. Behavioural economists call it a “cognitive bias.” Adjusting away from the anchor takes effort, and most of us don’t realize we’re doing it.
In 1974, researchers Amos Tversky and Daniel Kahneman showed how anchoring skews judgment. Participants asked to guess the number of African countries in the UN gave higher guesses if they first saw a high random number. That same brain quirk applies to shopping prices.
How to Outsmart Anchoring When You Shop
The good news? You can fight back! Here are a few tricks:
1. Set a Budget
Decide your spending limit before heading out. That way, you’re less likely to be swayed by high anchor prices.
2. Do Your Homework
Look up average prices for the products you want. Knowing the typical range helps you spot fake discounts.
3. Pause Before Buying
Take a step back. Revisit the deal later and ask yourself if it’s still worth it.
4. Be Skeptical of Discounts
Ask: Was this product ever really worth the “original” price? If not, the discount is just a clever trick.
Anchoring Isn’t Just for Shopping
Anchoring pops up in other areas of life too:
- Job Offers: Employers often start with a high or low offer to anchor salary expectations.
- Real Estate: Listing prices set the tone for how much buyers are willing to pay.
- Legal Negotiations: Initial demands influence settlement amounts.
The Takeaway: Stay Sharp, Shop Smart
Anchoring is a powerful tool that can sway your decisions without you even realizing it. Retailers use it to their advantage, but now you know their game. The next time you see a “big discount” or a premium subscription plan, pause and think: Is the anchor price driving your decision?
Ready to take control of your shopping decisions? Visit our blog for more insights into the psychology of pricing, marketing tricks, and practical tips to save smarter.
