The assumption today when it comes to shopping, in general, is that everyone is on the lookout for a bargain. A recent study by Parago demonstrates just how much this assumption is actually applied in principle when people are making purchases. The study found that just about 75 percent of shoppers identified themselves as more sensitive to price in 2013 compared to the previous year. One reason for this additional sensitivity may stem from 42 percent of those surveyed expressing the perception that their purchasing power has decreased over the past year. Additionally, with the widespread availability of tools that make comparison-shopping easier and faster than ever before, shoppers are empowered to act on their feelings and perceptions.
This increased price sensitivity is manifested in shoppers’ behavior in several ways. In 2013, 80 percent of shoppers actively looked for a deal before doing any shopping and nearly 50 percent chose to shop in places where they would be able to use their mobile device to check prices. Compared to 2012 when 69 percent of shoppers looked for deals and only 11 percent of shoppers chose to shop where they could price check, this represents a significant increase and indicates a trend that is likely to continue.
Pricing has long been one of the fundamental factors influencing shoppers’ decision-making process. This study indicated exactly how far up the economic chain pricing continues to be a driving motivator. Of those earning less than $50,000, 70 percent indicated that price is the largest determining factor in their purchasing decisions – the next largest determining factor identified in this economic bracket was quality, with 11 percent indicating quality as their largest determining factor. Of those earning $50 – $100,000, 53 percent indicated pricing as their largest determining factor with quality again taking second place at 20 percent. Of those earning $100,000 – $200,000, 39 percent indicated pricing as their largest motivating factor. In this economic bracket, “brand” was identified as the second largest motivating factor with 31 percent. Those earning above $200,000 identified brand (38 percent) and quality (28 percent) as their top two motivating factors. It is worth noting that even among the $200,000-plus group, nearly 20 percent identified price as their largest motivating factor.
What does all of this translate into for you and your online store? As we head into 2014, EVERYONE is sensitive to price and most shoppers actively seek out deals both before and during their shopping. Maintaining an awareness of real-time pricing and actively responding to changes has never been more important. Over 80 percent of shoppers indicated they would be willing to physically travel 10 minutes out of their way to save 20 percent. Those shoppers will definitely take an extra few minutes when shopping online to save even less than that. Repricing solutions, which allow you to monitor and respond automatically to changes in pricing across the internet are an ideal method to ensure that you stay visible and relevant when shoppers are searching online.
Aside from the actual pricing of an item, rebates are an increasingly popular method among retailers as a means of competing on price without “giving away the house”. The most preferred method that shoppers indicated for receiving rebates is Facebook. If you do not have a Facebook presence, welcome to 2014! Now go make your Facebook page… seriously, make a page. Social media is a fantastic tool to actively engage with existing and potential shoppers and provides a platform for differentiating your store in areas other than price. An active social media presence with your repricing solution provides a great combination of competitiveness on price, and engagement at the “people level”. See you online!