The economy is improving—but you wouldn’t know it from shoppers’ spending habits. Shopper price sensitivity is up significantly over last year—and that holds true for consumers at all income levels, reports the Parago Study Shopper Behavior Study 2013.
Shoppers will do whatever it takes to get lower prices on products and services, from showrooming on their smartphones to driving all over town and, of course, doing endless research online before they commit to a purchase. The good news, however, is that consumers are still shopping regularly and feel emotionally rewarded when they find significant savings.
Here’s some of what Parago found:
- Price is three times more important in the purchasing decision than any other criteria. More than half (56 percent) of respondents say price is their number-one criterion, afar ahead of brand (17 percent) and quality (17 percent).
- Price was the primary influencer for all households with incomes of $199,999 or less. Only once household income was over $200,000 did price become less important.
- 75 percent say they are more sensitive to price than at the same time last year—even though the number who say their purchasing power has increased is up compared to last year. In other words, even consumers who actually have more money feel more concerned about price.
- 80 percent of consumers look for deals before they go shopping.
Interestingly, the study found that rebates were valued more highly than on-the-spot discounts. Consumers would rather get a larger rebate (even if they had to wait for it) than a smaller discount. They’re also willing to put forth some effort for the rebate:
- 81 percent will drive 5 to 10 minutes out of their way for a $10 rebate.
- 58 percent will participate in a social media contest to earn an exclusive rebate.
Keep in mind that although shoppers are focused on the best deal, that doesn’t necessarily mean the cheapest option—it means the best value for money. That’s good news for small businesses who can’t compete with the Wal-marts of the world on price.
What does this survey mean for your marketing?
- Emphasize value—not necessarily low price, but how your product or service is a good deal because it will save the consumer time, save money, outlast the competition or make the buyer’s life easier and more rewarding.
- Consider developing rebate programs, which consumers find highly desirable.
- Use social media. With consumers showing high willingness to interact in contests or polls on social media to get a rebate, this can be a good way to get them to opt-in to receiving further marketing messages from your business.
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