In every retail category consumers are using multiple devices to research and shop faster than ever. The implication for today’s retail marketers? We need faster ways to compete for customers who are making decisions in shorter timeframes.
Parago conducted shopper research during the 2013 peak holiday shopping season to identify emerging omnichannel path-to-purchase shopping trends for the year ahead. The consumer survey uncovered shopper behavior that every marketer should take to heart:
- Path to purchase is shorter: The average time to purchase across retail categories is now less than four days, even for big-ticket items like appliances.
- Deal-finding activities are increasing: 65% of shoppers report being more sensitive to price now than a year ago and 88% of consumers look for deals, rebates and best prices before shopping.
- Showrooming threat is not dead: Four out of five 18- to 49-year-olds own smartphones, and nearly 50% of all shoppers compare prices in-store using smartphones.
- Online shopping nears full saturation: 99% of shoppers with incomes at $50,000 and above shop on their computers. Two out of 5 people now shop on tablets.
In what seems to be a dichotomy, price sensitivity continues to be at an all-time high, (which is driving the desire to find the best deals,) and the path to purchase has accelerated, both online and in-store. So not only do marketers need to remain competitive on pricing and value, but now a new factor is coming into play: the need for speed to close more sales.
This new narrow window for marketing opportunity requires fast, nimble promotional strategies. Dynamic pricing — the ability to remain competitive with real-time, best-in-market prices — is quickly becoming a necessity. (Amazon’s dynamic pricing model is what has beat out a number of retailers, serving up lower prices to shoppers as they showroom.)
However, marketers should take caution: across-the-board price matching is not a sustainable tactic, as it will quickly erode margins of brick-and-mortar retailers. Rather, our research shows that retail marketers must create urgency with limited-time deep discounts.
One option: dynamic-price rebates that can respond to consumers’ demand for lowest price while protecting margins, unlike across-the-board online price matching.
As the omnichannel continues to expand, retail marketers have a lot to contend with. (Highly competitive prices from e-tailers like Amazon, rising smartphone adoption, the showrooming boom and incredibly price-sensitive consumers.) To capture the evolving shopper and thrive, marketers need to disrupt the path to purchase with a dynamic, real-time pricing model. Not just online, but in brick-and-mortar stores, too.
Rodney Mason is CMO of Parago.