Financial analysts say the economy is on an upswing, but consumers are still cautious about spending. According to a new study from Parago, American shoppers are routinely choosing price over brand and that could hurt small retailers on the web.
After long months of rampant unemployment, high gas prices, and a poor housing market, consumers are feeling hard pressed to keep up. 70% said they were more sensitive to price and 83% said they felt their purchase power was the same or less than it was a year ago.
Because of this, 66% of those surveyed said price was the primary factor in deciding what to purchase. This is up from 60% last year.
With price being such a key factor, more people than ever are reading circulars, looking for deals online and researching prices before buying. A full 95% of shoppers said that a good deal was more important than brand loyalty.
A year ago, only 59% of the respondents said they researched prices. That’s a big leap in a short time.
Advances in technology have made it easier to conduct price research while on the go, but that didn’t affect the folks in this survey. 73% of them said they’ve never used a mobile app for price comparisons.
Going Out of Their Way for Savings
Saving money is so important, shoppers have shown their willingness to work a little harder if it means a lower price.
77% of those surveyed said they’d drive up to ten minutes out of their way to save $10 on a $50 sale. With gas prices being what they are, that might not be a great trade-off!
Couponing and deal sites are still popular:
- 79% of consumers at least sometimes seek online coupons before purchasing.
- 65% of consumers would like to receive a weekly email alerting them to coupon offers.
- 91% of consumers indicating they are likely to register for deal sites, the message is clear.
The most interesting fact in this pack? That 95% of consumers are interested in product rebates.
Rebates used to be the main method mom used to recoup some of her grocery budget at the end of each month. I remember my mother matching up box tops to forms, then mailing the lot out to a post box somewhere in the mid-west. Three months later, a check would arrive for $1.00 or possibly $5.00. It was a lot of work for small returns but those checks added up.
Pago says that in 2009, only 37% of consumers turned in rebate forms. That rose to 48% in 2010 and has remained in that ballpark ever since. But thanks to technology, rebates are making a comeback. Now shoppers can scan products with their smartphone, type UPC codes into an online site or get instant rebates with a shopper card at the store.
Here’s a funny thing. Before I found this report today, I collected up old cable bills to send to Showtime for a rebate on my service. It’s the second rebate I’ve sent out this year which already puts me way ahead of last year. So, if I’m a typical shopper (and I believe I am), I’m proof of the pudding. Rebates really are making a comeback.
The bottom line here is price, price, value, price. Which means if you don’t offer the best price around on what you’re selling, you’re likely to lose the sale to the competitor that offers more for less. That’s rough, because many small businesses have already slashed their profit margins to the bone. The only way around this is to sell something truly unique or offer service that’s so good, people are willing to pay a little more.
The Parago 2012 Shopping Insights report is short, easy-to-read, and it’s free. You can see it right here.