Retailers train customers to seek out deals
Shoppers in the United Kingdom have reported being more sensitive to price now than they were a year ago, and many of them feel that their purchasing power has decreased, according to shopper research from retail incentives company Parago.
The study, entitled 'Let's Make a Deal', found that regardless of income, shoppers now seek out the very best prices and are willing to go out of their way to save even a small amount. Amid a lagging economy, new deal-seeking activities are becoming the norm among UK consumers, with high-value cashback rebates programmes a top attractor.
The study found that shoppers are using circulars, fliers and the internet to research deals before they shop. Finding the best value is a practice now cemented in consumers' path to purchase due to several factors: greater price sensitivity, reduced perceived purchasing power and easier access to deals on mobile phones, online and via social networks.
"Consumers of all income levels are feeling the pinch of the lagging economy. As a result, deal seeking has become an engrained habit among UK shoppers," said Lindesay Brown, managing director for Parago in the UK. "The study also found that, because consumers are focused on the very best price, the majority are finding that cashback rebates deliver the greatest value, versus other promotions."
Among the study's key findings:
- Price sensitivity is up Nearly 3 out of 4 shoppers are more sensitive to price this year due in part to 44% of those surveyed feeling their purchasing power has decreased.
- Shoppers will go out of their way for discounts More than 75% of consumers would drive 5-10 minutes out of their way for a £10 discount on a £50 product. A full 93% of shoppers would drive 5-10 minutes out of their way for a £20 cashback discount.
- Price is the top purchase influencer The large majority of shoppers (65%) report that price is the primary influencer on purchase decisions, above store (13%), quality (12%) and other factors.
- Preference for cashback rebates is growing When given the option of a lower-value instant discount or a cashback rebate, the majority of consumers prefer the rebate. This is a strong win for marketers, as the instant discount and cashback rebate have the same net promotional cost. Additionally, most shoppers are interested in seeking out rebates (72%) and feel they offer great savings opportunities (79%).
- Deal-seeking behaviour is booming Before shopping, 90% of consumers look online for the best deals and 89% look for sales, deals, cashback rebates and best advertised prices.
- Demand for deals in social networks 1 out of 3 shoppers would participate in a social media contest to receive an exclusive cashback rebate.