Report: Amazon Uses Jedi Mind Trick To Convince Shoppers It’ll Always Have The Lowest Prices

Image courtesy of (protohiro)

If you ask someone why they decided to buy a product on Amazon, the answer will often be, “Well, they have the lowest prices.” But according to a new report, that’s just an Amazon mind trick at work to make people think that’s always going to be true.

It’s all a popularity contest: Because Amazon knows that the most popular items will often be the ones customers are searching for, it’ll identify the belles of the ball on its site and price those specific product models lower than its competitors. But those items that aren’t so much in the limelight will get priced higher, according to analysis of Amazon’s pricing habits in a new report from Boomerang Commerce, reported by Re/code.

In one example, Amazon tested price reductions on one of its most popular TVs over the six months leading up to Black Friday, when it dropped the price by $100, below competitors’ prices. However, the price of HD cables that customers often shop with along with a new TV went up 33% ahead of the holidays, Boomerang says.

Those particular cables weren’t among the most popular in their category, which means people aren’t going to see those prices and have it affect their overall perception of Amazon. And since they’re not as expensive as say, a huge TV, customers might not be doing as much comparison shopping.

“Amazon may not actually be the lowest-priced seller of a particular product in any given season,” the report reads, “but its consistently low prices on the highest-viewed and best-selling items drive a perception among consumers that Amazon has the best prices overall — even better than Walmart.”

How Amazon Tricks You Into Thinking It Always Has the Lowest Prices [Re/code]