The age of discounting may finally be winding down.
Conventional wisdom and consumer research have long dictated that blasting out coupons is the best way to trigger a shopper to buy. But new research from product pricing solutions firm First Insight reveals that some purchasers might be kicking their addiction to promos, and focusing on another product attribute instead.
In surveying 1,000 consumers across the country, First Insight discovered that retail discounts play a far smaller role in the purchasing decision across a number of product categories and demographics, though price reductions still matter for some purchase considerations. Rather, shoppers of all stripes have quality top of mind.
In fact, similar numbers of men (54 percent) and women (51 percent) expressed that product quality is the highest consideration when shopping, and those figures hold up across generational groups.
While price is most likely to get Gen Xers (41 percent), it’s far less of a factor for Baby Boomers and Millennials (36 percent each). Even across income levels, quality trumps sticker price, First Insight said. Nearly two-thirds (62 percent) of individuals earning $100,000 or greater cited quality as their highest priority, compared with the 49 percent pulling in less than who also seek out well-made items regardless of cost. Conversely, price is the driving consideration for 43 percent of the sub-$100,000 earners, compared with just 28 percent of high-income shoppers.
First Insights CEO Greg Petro said that shoppers “trained” to expect discounts are finally discovering that price isn’t the sole, or even most important, factor in the purchasing journey.
“The results of this study indicate that we may be reaching a tipping point, as retailers who have been focused on providing consumers with the quality, differentiated products they want and the price they expect are gaining greater traction and changing the consumer mindset,” Petro said.
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“As the pendulum swings away from discounts, retailers have an opportunity to capture greater sales through quality products in every category, from apparel to furniture and appliances,” he added.
Some product categories were more susceptible to discounts than others, though the data shows price reductions seem to matter less where big-ticket purchases are concerned. Ninety-eight percent of those shopping for home furnishings told First Insights that discount offers had no influence on their purchasing decision, followed by 74 percent of car buyers unaffected by promotional activity. Consumers shopping for appliances (36 percent), home electronics (27 percent) and smartphones (26 percent) also said discounts didn’t factor into their purchasing.