Retailers and brands often use a 'from-now' discount phrase: "From £4, now for £2.99! It's done to make the difference between both prices clear and to emphasise the discount offered.
But there is another way to increase the perceived discount without incurring further cost: place the old and new prices further apart. This gives the discount more emphasis and can better influence consumers purchase intentions.
A larger physical distance increases the numerical difference
Coulter & Norberg studied this effect. Their idea was that the perception of the numerical difference can be influenced by the physical distance between two prices, as the physical distance makes the numerical difference feel bigger.
In the first study, participants were shown two prices and they had to indicate whether one price was lower or higher than the other as quickly as possible. The participants reacted quicker if there was more distance between the prices. The distance made participants notice a price difference faster, if the prices were situated further apart.
In the second study, participants were shown two pairs of prices. They had to indicate which of the two pairs showed a larger difference as quickly as possible. Again, participants noticed the difference quicker, if the distance between the prices was bigger.
In the third and fourth study, participants were shown print advertisements. Again, in both studies, participants considered the price difference to be larger when the prices were printed further apart. In fact, the further apart the prices were, the higher the discount was perceived to be. If the prices were printed closer together, the discount was perceived to be lower than it actually was.
Remarkably, participants also indicated higher purchase intentions for prices that were further apart. However, this effect occurs only for horizontal price displays and not for vertical price displays.
The study clearly showed a way to increased consumers' perception of the discount without higher cost: place the 'from-now' prices far apart. This gives the discount more emphasis and makes the discount feel larger, increasing consumers' purchase intention.
