When the policy was rolled out world-wide, sales increased dramatically. It seemed that there were a whole lot of people all over the world who were willing to pay for the cost of an extra book just to take advantage of the free shipping deal. While the folks at Amazon were pleased over the result, the noticed that in France, (and only in France) there was no increase in sales. So why were the French so different from the rest of the world with regards to this offer? According to Ariely, it turns out that the French were reacting to a slightly different deal.
“Here’s what happened. Instead of offering FREE shipping on orders over a certain amount, the French division priced the shipping for those orders at one franc. Just one franc–about 20 cents. This doesn’t seem very different from FREE! but it was. In fact, when Amazon changed the promotion in France to include free shipping, France joined all the other countries in a dramatic sales increase. In other words, whereas shipping for one franc–a real bargain–was virtually ignored by the French, FREE! shipping caused an enthusiastic response.
Here’s the takeaway: When consumers are faced with choices where one is free, they often overreact to the free one. It certainly happened on a large scale here with the French, but it also happens everyday in our own backyards. If you have to discount, think about the power of FREE and how it affects human behavior.
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