Lowest price not paramount for most UK Shoppers
June 28, 2012
Consumers have become more sophisticated in their understanding of what constitutes ‘value’, according to the latest report from specialist shopper research agency Shoppercentric.
When asked what constitutes good value, the top answer from UK shoppers was ‘Getting the most for the money I planned to spend’, chosen by 28% of Shoppercentric’s respondents.
Only one in four shoppers defined ‘value’ as being about low, or lowest, price, while 21% say that for them, ‘Getting the right quality for the money I planned to spend’ is most important.
‘Feeling that what I’m buying is worth the money I’m spending’ also scores well, with 20% of the sample opting for it.
Danielle Pinnington, managing director at Shoppercentric, says that the agency’s latest report, WindowOn the Value Equation, focuses on the latest trends in promotions and what ‘value’ actually means to shoppers today.
Pinnington observes: “Delivering ‘value’ is more important than ever; but what does value actually mean to today’s shopper?”
Based on how shoppers describe value, Shoppercentric has identified four key attitudinal tribes among UK shoppers:
Quality Matters (34% of shoppers), for whom the best quality for the money is key: “a fair price and quality”;
Low Price Hunters (23%), for whom low or lowest price is their focus: “lowest price for the best quality I can afford”;
Holistic Value Seekers (22%), for whom the value judgment is too subjective to break down into a single definition: “the least waste for the price”;
Pile It High (21%), for whom quantity is a key part of value: “price per 100g or similar”.
BOGOFs remain the most attractive promotion (for 76% of UK shoppers) but this is down from 79% when Shoppercentric conducted a similar survey in 2009.
Money off single items takes second place in popularity with 66%, down from
69% in 2009.
Vouchers/coupons have experienced the biggest increase in usage and replace multi-buys to take third place. 53% of shoppers use vouchers/coupons now, an increase of 6 percentage points since 2009.
Multibuys (3 for 2 etc) have dropped by three percentage points since 2009 and slip into fourth place with 50%.
Growing in popularity are loyalty card offers, link saves such as meal deals, and added value promotions like free gifts or competitions, all up three percentage points on 2009 scores.
Shoppercentric also analysed how the different major retailers are perceived by consumers.
Despite a problematic start to 2012, Tesco remains the retailer most likely to be associated with good overall value by UK shoppers (42%)Its highest score on individual factors is for ‘good promotions’ (26%); but Discounters and
M&S also score higher for this area (with 27% and 40% respectively).
Pinnington says: “Today’s cost-conscious shoppers are very savvy and they have a greater awareness of pricing; a willingness to compare prices; and they use word of mouth or social media to share good deals. Increasing the use of promotions to drive footfall and increase unit sales does not work across the board. Shoppers have grown cynical about promotions, with many believing that price cuts are achieved by hiking prices first, or by reducing pack size.”
She adds: “Our findings indicate that shoppers are now looking for solid reward-based offers – and they are prepared to wait for them. Of course, this change in mindset doesn’t mean shoppers aren’t buying on promotion. An offer on the right product, at the right time will increase sales, but the current promotion-deluge approach is not a long term strategy that can be sustained. Use promotions too often, and shoppers re-adjust their price expectations to the promoted prices rather than recommended sales price. Retailers can’t afford for that to happen.”
Pinnington concludes: “Relying purely on price is not only a lazy strategy but, if used long term, a damaging one too.”