Beauty supply: Compete with psychology, not price

Raising prices isn’t new. Experienced shop owners already sense the right timing and customer reactions. But today, deciding when and how much to raise prices isn’t enough. Wholesale costs have risen, tariffs remain uncertain, and raw materials and logistics aren’t stable. Most importantly, customers are now much more cautious with spending. It’s time to closely examine the psychology that lets customers accept price hikes without resistance, a familiar but often unconscious strategy, and adapt it uniquely to your store.

Inevitable price hikes: How to make them easier for customers?

With smartphones, customers can instantly compare prices, so simply saying “It’s because of the current situation” no longer works. To protect both sales and trust, price increases must be strategic.

1. “Often, small, and quick” subtle enough that loyal customers barely notice.

Small, frequent price increases of $0.25 to $0.50 cause less resistance than a large one-time hike. Low-priced, frequently bought items are price-sensitive but often not closely watched. For example, raising a $2.99 item to $3.29 usually goes unnoticed and doesn’t upset customers. It’s better to update price tags gradually over time, not all at once.

2. “Bundles” – make it feel like a benefit, not a price hike

Price hikes on single items feel sensitive, but bundles often seem like a “smart choice.” For example, bundling a $5.99 product with a $1.99 small item at $7.49 makes customers think, “Two for under $8,” focusing on value. Showing original prices of each item in the bundle boosts this psychological appeal.

3. Trusted favorites that can handle price increases.

Regularly repurchased items like hair bundles, edge control, certain gels, and oils face little resistance to small price hikes. Customers see them as irreplaceable, so increases are more easily accepted. Review sales data every 3–6 months and raise prices slightly on high-repeat items.

4. Offset price concerns with the value of in-person experience.

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When in-store experience delivers more value than the worry about price, the price matters less. Customers find new reasons to buy while checking styles, refreshing moods, and enjoying information.

• Small sampling corners to touch and try new products
• The thrill of spotting social media favorites in store
• Simple recommendation cards to easily copy celebrity styles

Real-World Business Strategies

Here’s a pricing strategy widely used by traditional retailers, big chains, and independent stores alike. For offline-focused shops like beauty supply stores, psychological pricing and timing are key to reducing the price resistance.

1. High-Low Pricing Strategy

This strategy keeps regular prices high but drives purchases with standout discounts at specific times, making sales feel like special opportunities. Customers wait for sales and accept higher prices without resistance, keeping their visit cycles steady.

• Macy’s sells at full price but holds large seasonal sales like “One Day Sale,” creating a loyal group that anticipates discounts and maintains regular price perception.
• JCPenney has long used this by distributing Sunday newspaper coupons and running short, deep sales to boost traffic.
• Gap strengthened this approach with recurring offers like “40% Off Everything.”

2. Loss Leader Strategy

This is the classic loss leader strategy. Popular items are sold below cost to attract customers, who then buy higher-margin products to offset losses. This boosts store traffic, turnover, and can raise overall spending.

• Costco draws customers with below-cost items like Rotisserie chicken ($4.99) and Hot dog combos ($1.50).
• Walmart runs weekly “doorbuster” deals on special items to drive weekend traffic.
• Amazon promotes certain brand products below cost to attract Prime members.

3. Psychological Pricing Strategy

Using prices like $1.99 instead of $2.00 or $49.99 instead of $50.00 reduces perceived cost and eases acceptance of overall price hikes.

• Most US retailers like Target, CVS, and Best Buy use .99 or .49 endings on nearly all prices.
• Amazon breaks down prices to $X.99 or $X.95 to lower customer price perception.
• Zara and H&M use prices like $19.90 or $29.90 to make price points seem more reasonable.