Apple and the psychology of retail pricing #makerbusiness

Credit: Apple


Apple was turning heads when it released its $19 screen cleaning cloth. And while it might seem surprising to price an item like this at such a high price, according to the Wall Street Journal, there is some wisdom here.

We’re all familiar with the 99 cent trick, so much so that pricing items at even, round numbers, like $15.00 seems to be the stranger thing to do.

The price of almost every Apple product ends in one number: 9. This is a widespread retail tactic, known as “charm pricing,” designed to generate a feeling of good value and is rooted in decades of behavioral research.

So that explains why its $19 and not $20, but why is it so expensive?

Nineteen, they say, is just right—neither too high nor too low to turn off the company’s target customers. When you’re buying a big-ticket item like an iPhone 13 ($799) or a MacBook Pro ($1,999), that $19 add-on effectively disappears into your shopping cart. And yet, the analysts say, the price is high enough to suggest you’re buying a superior product—even if it isn’t.

Apple might be considered overpriced but some, but its also considered to be high quality. The bargain Apple is making with the consumer is that you pay a premium for high quality and reliable goods. The $19 price tag is caught up in this.

Selling cables, adapters and polishing cloths far below $20 might put them in “cheap” territory. A lot of Apple’s success is based on its products’ positioning as an attainable luxury, something that costs a bit more but is justifiably worth it.

Now is the cloth actually worth the premium, or is it just hitting the retail price floor that Apple has set up? Only one way to find out.

Check out the whole article in the WSJ.

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