Want a movie? Digital download. Storing photos? On a drive, of course. Reading a newspaper or book? E-reader. We totally prefer digital stuff now that smartphones practically tell us when to breathe, right?
Not so fast. As psychologist Dr. Alain Samson points out, researchers have found that people are willing to pay more for the physical versions of books, photos, and movies. The researchers theorize that this is because having something that is tangible increases the psychological sense of ownership an individual feels over the item.
But even this is somewhat of a simplification. The research indicates that the gap between physical and digital valuations also is influenced by whether you
- Rent or subscribe instead of outright owning.
- Don't associate the item heavily with your identity or sense of self.
- Don't feel much need to exert control through the way you interact with your stuff.
How can we do better?
Samson hones in on the last of the above points and notes that, if people put a higher value on things they have more control over, businesses can help buyers accept higher price points simply by ensuring their digital products have options for customization.
But companies also might do better if, rather than merely pointing out the conveniences or advancements within digital products, demonstrating the use of those products in everyday life, they also more clearly framed marketing in terms of beliefs, group associations and goals. They also might be able to address the reduced psychological ownership of renting/subscription by taking active steps to make the good seem more prominent and permanent. For example, push notifications could remind the buyer of continued access or give exclusive previews for upcoming updates to give a better impression that the digital products aren't going away and will continue to be of service. Artificial intelligence can make these tasks simpler, as it's already capable of gathering the data necessary to provide customized messages to consumers.
But other elements might come into play with higher physical valuations, too. For example, in recent years, marketers have pushed digital goods as being better from the standpoint of saving space. But for centuries, people have put what they own on display as a basic way to indicate status and wealth. Some of the value people associate with physical versions of products might come from the fact the physical products do a great job of communicating the purchase power associated with strength, intelligence, hard work or authority. Invitations to invite a friend to purchase, share reviews or guest access provisions might address this issue, as these methods all offer buyers a way to crow about what they've bought even if it's not displayed.
Another issue is health and bombardment. For example, there's been somewhat of a pushback against e-books because of the way continued screen use can strain the eyes. People also are preferring physical copies because, after working on screens all day, people simply want to shift gears and interact with the world in a different way.
The bigger picture of value
In the end, the research outlined above suggests that the value of a product doesn't come simply from the features the product has. It also comes from how consumers see themselves and others, the way the product addresses psychological needs in addition to practical or logistical needs. There's no such thing as a one-size-fits-all consumer, but if we can at least better identify trends within those perceptions and psychological needs, the better we'll get at closing price gaps that hurt the bottom line.