Does providing extra true price information about food products in stores influence shoppers' buying behavior? Researchers at Wageningen University & Research in the Netherlands did a practical experiment to find out. They came to a remarkable conclusion: the more a product's true price increases status or helps the environment, the more willing people are to buy it.
True price includes social costs in a product's purchase price. These are costs incurred 'behind the scenes' to reduce adverse environmental effects, like water pollution during production, health care costs from eating and drinking unhealthy products, or costs saved by underpaying growers. Positive outcomes, such as carbon sequestration, landscaping, and health, also affect a product's true price.
These prices provide insight into different products' sustainability performance. By comparing those, companies and consumers could make different, potentially more sustainable choices. The true prices used in the experiment included four external factors: land and water use, climate tax, and underpayment. That led to product prices rising between one percent (for arugula) and 14% for cauliflower.
Three kinds of information
Wageningen University & Research researchers wanted to determine if specific true price information could affect food product choices. In a real-life experiment with fruits and vegetables, three types of data were displayed on shelf cards. Firstly, basic information ('This product has a true price').
Then, details about the extra money's redistribution ('We pass on the extra money 100%') and, lastly, information that appeals to one's social status ('You're one of the first true price payers in the Netherlands'). Shoppers in a supermarket - the first (organic) supermarket that uses true prices - in Amsterdam were subjected to this experiment.
Social status plays a role
On the surface, the experiment shows that this extra information does not influence purchasing behavior. Shoppers behaved more or less the same as before. They also took no, or very little, notice of the additional information provided. Still, the investigation showed that true price information could have an effect. People are happier to buy true-price products if they have confidence in them or think they can be seen as different for purchasing such products (social status).
Or if they think their purchase will positively impact people and/or the environment. That was even truer for shoppers with relatively low confidence in true-price products. These consumers are even more likely to intend to buy true-price products if they feel these products will help them stand out (status) or if they expect their purchase to have an impact.
Will spend more
The test also showed the researchers that two-thirds of the participants are willing to spend more on true-price products. Also, in daily practice, people kept buying true-price products, and the true prices were accepted. The price increases may not have been huge, but they were not zero either. Mariët van Haaster-de Winter, a researcher at Wageningen University & Research, adds a caveat, though: "We did the experiment in an Amsterdam organic supermarket."
"It has loyal customers with great confidence in true prices. For them, price increases may be less of a purchasing obstacle. Plus, since they already opt for organic, they're probably more willing to contribute to sustainability than 'mainstream' consumers," Mariët says. "How do we translate the true price concept's outcomes and possibilities to those 'mainstream' consumers? More research is needed to understand if and how those people will pay true prices for food products."
Drawing attention
It is also evident that in follow-up research, the shelf cards need to draw more attention. "A next intervention should better attract customers' attention or combine multiple intervention types," Mariët concludes.
Source: WUR
