Study Offers Clarification on Consumer-Purchasing Priorities
As consumers rely on more e-commerce options and the threat of increased tariffs on goods from China grows, cloud-based technology firm First Insight, Inc. noted that retail executives are not accurately informed about the impact of pricing.
During a recent survey of consumers and retail executives, the Warrendale, Pa.–based company found a disconnect between retail executives’ perception of consumer purchasing priorities and the important factors that customers value.
While both groups cited quality as most important, only 20 percent of senior retail executives reported that, for them, low pricing ranked second compared with approximately 51 percent of consumers. Additionally, only 20 percent of senior retail executives believed that consumers perceived there were increases in in-store prices, but 60 percent of consumers believed there were increased costs.
“As tariffs come into play, it is more important for retail executives to understand what consumers are willing to pay,” First Insight’s Senior Vice President of Marketing Gretchen Jezerc said. “Retail executives need to understand, on a granular level, where there is an appetite to absorb a higher price point and where there is not.”
Despite the discount-oriented culture surrounding retail, Jezerc said that accurately identifying consumers’ priorities could help retail executives avoid missing out on valuable dollars. Not everything has to be discounted. “Our testing has shown 6 to 12 percent of products that we test with consumers could bear a higher price than what retail executives were willing to charge,” she said.
The study also found a large discrepancy between how retail executives perceive the role of new technologies in consumer purchasing decisions. With 75 percent of respondents surveyed owning smart speakers such as Amazon’s Echo with Alexa voice control and 60 percent using those devices to research pricing prior to making a purchase, 80 percent of retail executives inaccurately cited mobile technology as most important to their business.
Implementing new technology is important, but these tools are often costly, which allows room for customer analytics to provide answers.
“It is coming up more and more that retailers are recognizing the importance of analytics and the voice of their customers,”Jezerc said.