In 2018, Payless Shoes transformed a former Armani store in Santa Monica into a high-end boutique named “Palessi” for a social experiment.

Fashion influencers are present in the store, enjoying champagne and feeling like the VIPs they are used to being. They notice the price tags on the “Palessi” shoes, which are exactly what they would expect from a luxury boutique: triple-digit figures that connote exclusivity and high quality. However, how can a mere price tag have such a significant effect on their perception?

Primacy effect & halo effect

Have you ever heard of the Primacy Effect? It refers to the tendency of the first information we receive to have a stronger impact on our perceptions compared to the information we encounter later. The influencers were influenced by the ambiance and branding, which made them expect luxury. Consequently, they believed that they had indeed encountered luxury.

It’s important to take into account the Halo Effect, which is a cognitive bias that affects our overall impression of something based on one aspect of it. The shoes in question were placed in a glitzy store environment and given a high price tag, which created a halo effect around them, making them seem more valuable than they truly were.

The way users interact with a product or service can have a significant impact on their experience. If an app interface is well-designed or a website is intuitive, it can create a positive first impression and encourage users to engage with the product more. Environmental cues, such as visual and auditory cues, can also affect how users perceive a product or service.

The anchoring effect

Behavioral Economics is an interdisciplinary field that combines psychology and economics to study how people make decisions. One of the most widely known concepts in this field is the Anchoring Effect, which refers to the tendency of humans to rely too heavily on the first piece of information they receive (the “anchor”) when making decisions. This can result in biased and irrational decision-making, and understanding this effect is crucial for developing strategies for better decision-making.

During the Payless experiment, the high price point acted as an anchor, which significantly distorted the influencers’ perception of value. In their interviews, the influencers revealed that they were willing to pay hundreds of dollars for the shoes, despite the fact that their prices had been dramatically increased.

What’s the price of trust?

When it comes to user experience (UX), pricing is more than just a monetary value. It can also serve as a psychological trigger that gives users insight into the product they’re using. Have you ever wondered why some software services offer both a free and premium version? This is because they want to entice users with a free version, but offer more features and benefits with the premium version.

It’s a UX strategy.

The freemium version builds trust and familiarity, but the premium version, with its higher price tag, signals better features and greater reliability.

The “Payless” scenario showed that influencers were willing to pay more for shoes that they believed were worth the cost. A higher price often suggests better quality, craftsmanship, and exclusivity, which are all values associated with a premium user experience. This demonstrates that in UX design, the idea of “you get what you pay for” can be a powerful motivator for user behavior, whether it’s subscribing to a service or making a one-time purchase.

Cognitive dissonance and reconciliation

Let’s fast forward to the moment of revelation when the influencers finally discover they have been tricked into promoting a product that is not what it seems. Imagine their surprise when they realize that the “luxury” shoes they have been raving about are actually from Payless. While some of them may laugh it off, others may be shocked. So what could be going through their minds at this moment? This is where psychology can offer some fascinating insights.

At the root of their emotional distress lies a psychological phenomenon called Cognitive Dissonance. It is the mental unease experienced by an individual who holds two or more contradictory beliefs or values. On the one hand, they believe that they have bought luxury items, while on the other, they have discovered that they have actually purchased budget-friendly products. Attempting to reconcile these opposing beliefs creates emotional tension and a strong desire to resolve the dissonance.

As UX designers, we should always keep in mind that users need to trust the platforms and products they interact with. A poorly designed UX that fails to meet expectations can lead to cognitive dissonance and ultimately result in a loss of user trust. Whether it’s a website that takes too long to load or an app that doesn’t deliver on its promises, the psychological impact of UX on users is significant. Hence, it’s critical to design a user-friendly and trustworthy UX that meets their expectations and needs.

The Payless experiment has proved that managing customers’ expectations from the beginning is crucial. To ensure a positive user experience, providing a transparent and consistent service that aligns with your branding is important. If your service is budget-friendly, embrace it. If it is premium, make sure every interaction reinforces that premium feel.

Inconsistency is the quickest route to cognitive dissonance and a fractured user experience.

Social implications

The Payless experiment provided us with many insights into UX and psychology, but its impact extends beyond that. The events that took place in the fake store in Santa Monica raise questions that involve our entire society.

You may wonder, “Why did these fashion experts fall for it?” The explanation lies in social conditioning. From a young age, many of us learn to associate quality and social status with brand and price. This is not a coincidence, but the result of years of marketing strategies and cultural influences that promote materialistic values.

The Payless experiment was like a real-life version of “The Emperor’s New Clothes,” revealing our susceptibility to groupthink and social validation. We often rely on social cues to make judgments, sometimes to our detriment.

So, what does this teach us, not only those in the UX field but all of us? It is essential to recognize our inherent biases and learned beliefs. Why do we value what we value? How often do we make genuine choices, and how often are they influenced by external factors like social conditioning and psychological biases?

We are part of a greater system, a social construct that shapes our values and judgments. Recognizing this can be the first step to making more informed and conscious decisions, whether in designing user experiences or as consumers in complex socio-economic environments.

What I learned

This experiment serves as a valuable source of knowledge. It teaches us that every component, whether it’s pricing, interface, or environmental cues, plays a crucial role in shaping user perceptions and expectations. It also warns us about the psychological and emotional risks involved in designing user experiences.

Furthermore, it encourages us to reflect on our biases and become more aware of the societal cues that affect our choices. Are we blindly following certain beliefs and behaviors, or are we questioning them?

As we move forward, whether you’re a UX designer planning your next project or a consumer looking to make a purchase, it’s important to consider how our environments and preconceived notions affect our decisions. How can we incorporate this awareness into our personal and professional lives to make more thoughtful and informed choices?