Mark Price

Consumers Paying Full Retail Online

August 14, 2010

FROM RETAILWIRE:
It's true. Consumers will buy even if there isn't a BOGO or a 40 percent off tag attached to merchandise. Well, at least that's true some of the time when they are shopping online. Do you see retailers making the effort to get off the promotional binge across selling channels?      [more...]

From my experience with my retail clients, it appears that consumers have not significantly reduced their desire to purchase at a significant discount from retail price. However, my clients are also finding that the incremental lift that comes from discounts has been decreasing steadily in the past year.

So we find ourselves in a conundrum; consumers expect a discount in order to make a purchase, yet those purchases are rarely shown to be incremental. What happens is the result is that our clients face reduced profitability while maintaining similar retail sales volume.

In some cases, consumers may be willing to forgo an additional discount in order to receive value-added services. We find that to be true, among a limited group of customers. The good news is that those customers tend to be better customers for the organization in terms of total sales revenue and profitability.

But the jury is clearly still out.