The Secret Formula of Retail: The Decoy Effect
Ever wondered why you almost always end up buying the largest tub of popcorn at the cinema?
It’s not just hunger—it’s a masterclass in Pricing Psychology.
Imagine you’re at the counter and see these choices:
Small: ₹300 Large: ₹700
Most people would choose the Small, thinking ₹700 is a bit steep for popcorn.
Enter "The Decoy": The cinema adds a third option:
Small: ₹300 Medium: ₹650 Large: ₹700
Suddenly, the Large looks like an incredible deal! For "only ₹50 more" than the Medium, you get the biggest size.
The Secret: The Medium isn't there to be sold. It is the Decoy. Its only job is to make the Large look like a bargain, nudging you to spend more than you originally intended.
In retail, this strategy is a "secret formula" for increasing average order value without forcing the customer’s hand.
