In their second UK shopper study, “Let’s Make a Deal,” Parago, one of the world's largest providers of manufacturer and retailer promotional marketing programs, revealed 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. Amidst the lagging economy, new deal-seeking activities are becoming the norm among UK consumers, with high-value cashback rebates programs a top attractor.
Here at our Charlotte marketing agency, we have been working with our retailer and CP clients for years now (at least since the Great Recession of 2008) to help craft at-the-shelf solutions that appeal to consumers' prolonged recessionary mindset. The economic uncertainty and the severity of the last recession have left consumers on either side of the Atlantic feeling cautious and acting more frugally and with greater resourcefulness along their path to purchase.
Many consumers continue to embrace savings tactics like retailer loyalty cards, store brands, shopping lists, coupons and delaying purchases for sales, and from our perspective as a shopper marketing agency, frugal behaviors are likely to endure in the coming year. According to Deloitte's 2013 American Pantry Study, 94 percent of consumers plan to keep their spending on food, beverage and household goods at its current level even if the economy improves. In addition, seventy-nine percent of consumers still believe the U.S. economy is in a recession. (For what it's worth, 1 in 5 Americans also believe in alien abductions).
You can download a free copy of this study yourself, but here are a few key highlights
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 got out of their way for discounts: More than 75% of consumers would drive 5-10 minutes out of their way for a £10 ($16) discount on a £50 ($83) product. A full 93% of shoppers would drive 5-10 minutes out of their way for a £20 ($33) 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.
The shopper behaviour study was conducted via a national online survey during January 2014 with more than 560 respondents representative of the UK (in terms of education, income and gender).