Learn With Us
Join the Newsletter

Pricing Compression: Price Psychology & Price Anchoring

pricing compression Mar 21, 2022

In our Price Compression Series, we’re taking a look at the psychology of pricing, specifically price anchoring. The funny thing about pricing is that customers rarely know how much something should cost. It takes exposure to other products or information for a customer to contextualize a price and its perceived value. 

With Price Anchoring, a retailer can anchor the perception of pricing for consumers. We dug into the Headset data for the 3.5g Flower category and not only the price compression over the last 90 days but the most popular price band by strain category.

Generally, the first price a consumer sees becomes a reference point for all other pricing as they move through their shopping journey. 

Not just the category of products but a general feeling of the store and product offering can inform price. 

Most often the way we’re able to determine if something is a good deal is by getting it for a lower price than normally listed or by comparing it to similar products in the same category.


  • Displaying higher-priced items at the beginning of the shopping journey anchors the consumer to compare pricing. All other products shown will be compared back to the first higher-ticket item. The perception then drives consumers to look for either less expensive options or to shop at that higher price point because that is what is being presented as the norm.
  • Pick a focal item and consider grouping it with higher and lower-priced items
  • Ensure your inventory management includes a healthy amount of tiered pricing


  • Consider comparative package pricing when creating products creating a budget option, preferred median, and premium option at a varying price point 
  • Create in-store promotional pieces that allow for comparison pricing with the competition
  • Build your brand story in a way that is easy to remember with quick-hitting points about your quality and reasons to believe

Tactical insights to become
a Cannabis Retail Insider!

Access expert insights in one easy-to-digest
and follow-along newsletter.

We hate SPAM. We will never sell your information, for any reason.