Pricing it right

New unit pricing standard empowers consumers

Consumers have been equipped with a new tool making buying decisions easier with products now able to be compared on a fairer level, thanks to an international effort spearheaded by Australian experts including Consumers Federation of Australia (CFA) representative Ian Jarratt. The recently published International Standard, ISO 21041:2018, Guidance on unit pricing, provides a number of requirements to enable consumers to compare prices on similar items more accurately, read more here

Ian is the CFA representative on the Standards Australia Technical Committee CS-116 Guidance on unit pricing which contributed to the development of the standard, read more about the CFA Standards Project.  He also represents Consumers International on the international committee ISO PC 294. Ian campaigned for the mandatory requirement for supermarkets to display unit pricing on price tickets in Australia, and was recognised for his consumer advocacy by being awarded a Medal of the Order of Australia (OAM) in 2017.

Unit pricing – or comparative pricing – is a way for retailers to show the price of a commodity in relation to a standard unit of measure, such as the kilogram or litre. For example, for a 500 ml carton of milk offered at $1.95, the unit price would be $3.90 per litre.

However, this is not always consistent across retailers or products, creating an added layer of perplexity for shoppers and doing little for consumer trust. ISO 21041Guidance on unit pricing, aims to clear up the confusion by defining unit pricing systems and enhancing transparency of pricing information.

In a recent study conducted by the Queensland University of Technology, Australia, consumers reported a significantly greater ability to process price information and higher confidence in their price judgements when unit prices are presented consistently within stores. Additionally, the research indicated that standardized unit price presentation was associated with more favourable attitudes toward retailers.

John Furbank, Chair of the ISO project committee that developed the standard, said that by simplifying the price comparisons of products, ISO 21041 will benefit retailers and consumers alike.

“Shopping has never been more complex, with not only a greater choice but a wider range of packaging, in terms of weights and sizes,” he said.

“The Queensland study shows that clear and effective unit price information won’t necessarily drive consumers to just buy the cheapest product, but rather allow them to make more informed choices – and that reflects positively on retailers.

“ISO 21041, then, is a key tool for retailers, enabling them to provide clear and consistent pricing, ultimately building trust and loyalty as a result.”

The standard provides guidance on how unit pricing should be displayed in-store (both on-shelf and on packaging), online and in advertisements. It also highlights the importance of clarity and consumer education.

ISO 21041 was developed by ISO project committee ISO/PC 294Guidance on unit pricing, the secretariat of which is held by Standards Australia, ISO’s member for the country. Find out about access to free standards here.