Online deals and the color red versus the color blue.

July 23, 2012

This post from today’s Daily Stat (Harvard Business Review) should give all online retailers something to think about:

When people were shown online details about a vacation package against a blue background, their average “best offer” was $712, but it was $684 when the information was presented against a red background, say Rajesh Bagchi of Virginia Tech and Amar Cheema of the University of Virginia. The research participants were implicitly competing against the seller to get the best deal, and exposure to red induces greater aggression. Red has the opposite effect in auctions, where greater aggression makes people willing to pay more in order to best other bidders, the researchers say.

Source: The Effect of Red Background Color on Willingness-to-Pay: The Moderating Role of Selling Mechanism