The Death Of Psychological Pricing?

I came across an interesting article on the BBC website this morning - essentially, it dealt with the gradual disappearance of the £X.99 price tag. Viewed by many as one of the greatest marketing inventions of our time, it now appears that for a variety of reasons, psychological pricing* is no longer relevant.

There's a fair bit of evidence to support this idea, the rise of the pound shop amongst it. But more recently, as the article points out, there has been an even greater shift, with the big four supermarkets showing an increase of 150% in their pound-based promotions, compared to a 6% increase in promotions in general.

There's an obvious 'convenience' reasoning that you can apply - people just don't like having pockets or purses or wallets full of coppers. But without arguing that people are even less willing to damage their trousers or handbags during times of financial uncertainty than otherwise (which is almost certainly true, but equally certainly fatuous), that doesn't really mean much.

So are supermarkets suggesting that people are now so marketing savvy that the .99 suffix actually puts them off, because they recognise it as a bit of a con? And that the only option is to replace it with another, slightly more expensive marketing ploy? Hmm. The old 'people are simultaneously stupid and smart' argument. Nice.

Here's my suggestion - in times of economic stress, punters, regardless of what the newspapers might want us to believe, don't really want to think about money, and thinking about a £4.95 purchase takes that little bit longer, and requires that little bit more intellectual investment than thinking about buying something for a fiver. We buy, we're gone, we're out. Of course, that's as fatuous as anything else suggested in the article, but I'd argue it's equally valid.

So pyschological pricing - not dead, just different?

*I'm not going to go into detail on what psychological pricing is here - the wikipedia article I've linked to does an extremely good job of that.