Inaction Inertia: What retailers can do to fix it ?

Inaction Inertia: What retailers can do to fix it ?

Consequences of doing nothing! That’s what inaction inertia is all about.

This element of social psychology is evident time and again among both consumers and retailers.

Have you ever missed a great bargain, and regretted it? Then another deal comes in that did not look as attractive as the last one, and you did not show any interest.

If we go by the explanation in social psychology term, after missing the first opportunity to buy a product during a promotional period, the inaction inertia effect reduces the possibility of consumers buying another similar and apparently inferior product at a discounted price.

Not just consumers, retailers, especially online retail businesses too are bugged by inaction inertia time and again where a little conscious effort could have changed the equation in their favour. In this post, we would touch base this psychological phenomenon in the retail industry, and why businesses should be aware of it to make a better impact.

Why Inaction Inertia Proves to be Decisive in Retailing?

In the concept of inaction inertia where the subjective value (SV) and regret determine the buying possibility when no previous opportunity has been missed, regret considerations, on the other hand, are the sole determining factor when such an opportunity is missed. Inaction inertia crops up at least partially as getting preoccupied with the lost opportunity turn attention away from the financial advantages of getting another bargain.

It is simple to understand. Let’s assume that in your initial promotional offer the price set at Rs.200 for a product after 40 percent discount (original price is Rs.500), and most consumers miss it due to indecision. Now, once the promotional period is over, the price gets back to original price of Rs.500, many consumers are not likely to buy it since they are still thinking about the discounted price. Moreover, they even may not show interest in another similar product at a lower price as the product does not seem appealing to them.

Here retailers have a key role to play.

If you, for example, an e-commerce business owner, offering promotional sales too frequently, it may lead to inaction inertia among your buyers. This happens, particularly when visitors miss out on the lower price and then hold themselves from paying full price later. It is simply because the disappointment at missing a good deal occupies their mind and triggers inaction inertia. There are, however, other factors as well.

As a retailer, when you mark down your prices, the perception of potential buyers about that product’s value is altered. Once the product price returns to normal, buyers can only think of how much they would pay for another product with apparently lower quality.

Considering these factors, you should ideally mark down prices only when you don’t look to stock and offer the same product in the future. If your website has a product clearance section, you can get continued value proposition, provided the listed items are sold and completely cleared from your inventory. A strategy of offering arbitrary discounts can bring down your future revenue.

Ideally, discounts can be applied to products that you want to clean up from your inventory to bring in new items. When your intent is to move the older items, resetting their original price to normal does not help much. You also don’t have need set the price too low and hurt your profit margin.

Instead of getting into a price war to clean up your old inventory, you may think about an innovative strategy to create a buzz around those products. Here timing is also important since your competitors may also take up more aggressive strategies to get consumers’ attention. Keeping that in mind, you may set the range of discounts you are going to offer. For example, if a couple of your competitors are offering 40 to 45 percent discount on the similar products that you are offering at 20 percent, inaction inertia may affect your sales. It is because some consumers will grab competitor’s offer for instant gratification, whereas others who miss out on those higher discounted items, your offer may seem lesser lucrative to them. However, if you have a rather large and older inventory to clean up, the short-term promotional offer may not help. In that case, you can set the price lower gradually for a sustained period. As the news will spread, products will start moving faster.

On some occasions, you may find that a few items are still left, and the time to launch fresh arrivals is nearing. In those circumstances, you may have to set the lowest possible price to move them off the inventory. However, consumer psychology is more complex than we think, and despite all your efforts, things often may not look bright due to several factors involved such as choice paralysis, buyers’ remorse, and purchase justification.

How to Fix the Pricing Puzzle

As a retailer if you want to draw buyers’ attention to specific products, it is better to set pricing at a gradually lower rate instead of giving an introductory discount and returning to normal price. If you offer low price at the beginning and then increase it later, it is likely to bring down sales. This is the reason why such offers don’t work too well for e-commerce businesses. On the other hand, if you, for example, set initial pricing at 10 percent discount, and once the demand increases, gradually offer a higher discount for attracting more consumers.

You may also consider offering multiple versions of the products. For example, you can introduce a 50 ml. item at a lower price, and once the demand gets generated, offer 100 ml. of the same item at full price. Here the chances of inaction inertia among buyers will be lesser since the sizes of the items are different.

Closing Words

If you figure out the limitations of inaction inertia, you can use the principle in your business. Other than juggling with this complex psychological aspect of retailing, if you have to deal with other burning issues like the last mile delivery, we can surely help. At Smartbox, we are committed to providing state-of-the-art logistics solutions through our integrated parcel locker solutions. Instead of delivering products to individual customers, why not deliver the items in bulk? It will save your logistics costs (including re-attempts) significantly along with streamlining your business’ supply chain for better. If you wish to learn more about finding a way to the future of logistics, just give us a call at +91-8882-760-760 or send an email to, for a no-obligation consultation. Get ready to take a step forward.


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