In an era when Amazon, Walmart and Target dominate online sales, pricing is yet another tool retailers are still scrambling to compete with, especially as higher shipping and raw material costs plague the industry. Yet while pricing is a vital part of building a successful retail strategy—57 percent of shoppers go as far as to say that it has the greatest impact on their purchase decisions, according to a Bluecore survey—price isn’t everything, and shoppers are flexible if other relevant factors are at play.
When it comes to communication online, 36 percent of the 522 shoppers surveyed say that discounts have the biggest impact on their purchase. While that is the largest among the four factors highlighted, the lead isn’t substantial. Another 30 percent said relevant product recommendations were the most important engagement factor, while 24 percent highlighted the timing of the interaction. A mere 10 percent are influenced the most by engaging content (or a subject line), the Bluecore survey said.
The younger a shopper is, the less impressed he or she is with a brand’s discounts or promotions. While baby boomers are by far most impacted by price (52 percent), only 20 percent of Gen Z shoppers feel the same way. Millennials (29 percent) and Gen X and Y (33 percent) share a sentiment closer to their Gen Z counterparts than baby boomers.
Conversely, the timing of communication is the most influential for Gen Z audiences, with 38 percent finding that it has the biggest impact on their purchase. Only 16 percent of baby boomers valued communication timing, the retail marketing technology platform found.
When it comes to pricing, true value beats a great discount
Bluecore’s State of Personal Commerce survey indicated that price’s ability to generate excitement all comes down to how it is positioned to the consumer. For example, the price of the product itself was the main point of excitement for 30 percent of shoppers’ last purchases. This is ahead of deals, which brought delight among 25 percent of consumers.
With this in mind, it appears that price needs to be positioned as more of a value to get a shopper feeling good about a purchase, whereas showcasing markdowns or discounts carry less luster. In essence, more consumers felt the product was worth the price, and didn’t come away thinking they score a huge steal.
Apparel retailers have been scrambling to eliminate markdowns and discounts to recover margins in recent years, but the pent-up demand from the Covid-19 pandemic has, at least in the short term, made it easier to sell at full price. Given the shopper mentality in the first quarter, according to Bluecore, apparel sellers have an opportunity to maintain higher price points and ditch the discounts.
Bluecore also said that another 24 percent of shoppers were happiest about the product while 10 percent were enthusiastic about of the “certainty” of the purchase, meaning they had already purchased from the brand before and knew it would suit them well.
It appears that the biggest risks that come with price are if the retailer changes them. In fact, price was cited as completely souring a consumer on an offending brand, the study said. Thirty-seven percent of shoppers said they would end a relationship with a brand if there was a change in prices, causing bigger damage than two other major factors that aren’t related to the shopping experience. While 29 percent said they’d be turned off if a scandal or bad publicity hit the brand, 25 percent would cut ties based on a company’s involvement in social or political issues.
Given that consumers want to know what they are getting when shopping with a brand, price factors heavily into overall brand trust. As many as 65 percent of shoppers said price impacts their willingness to trust a brand, Bluecore said. Beyond price, reviews (53 percent) and brand values (43 percent) also have significant impact on brand trust.
Trust can be lost in numerous ways, so brands have to shore up their services and product lines across the board. The top offender of brand trust is actually faulty product, according to 28 percent of shoppers. This is huge for apparel retailers as they try to expand their online experiences, and must provide more transparent insights into factors such as size, fit and color.
Poor customer service (26 percent of shoppers) and an inadequate purchase experience (21 percent) would also negatively impact the trust in a brand.