If retailers know which deal-seeking customers to cultivate and which to leave alone, they can, using appropriate retail pricing strategies, concentrate resources on each target for a higher degree of sales and profit. So indicates a study by Experian Marketing Services* identifying and determining the market-value of deal-seeking shoppers. The report segmented shoppers into Deal Seeking Influentials, Offline Deal Seekers, Deal Thrillers, Deal Takers, Deal Indifferents, and Deal Rejectors. The study found that store environment, the brands it carries, and convenience were more important than price and service as influences on their shopping behavior. This demonstrates that many consumers are willing to pay more, provided they get what they want (a product/brand) where they want it (environment) when they want it (convenience).
Chart By Experian Marketing Services via MarketingCharts
1. First, we have Deal-Seeking Influentials, always seeking the best deal and the next hot thing. They tend to be younger consumers who love shopping -- and their friends come to them for advice about brands and products. They don't care about price or service. Deal-Seeker Influentials are very active on the Internet and social media, especially when it comes to posting about their favorite brands and products. To this segment, shopping environment is most important (100%); Brands (93%); Convenience (80%); Price (73%); and Service (68%).
2. Offline Deal Seekers are "The next-most deal-hungry" on Experian's “deal-seeking continuum.” As the “offline” part of their name suggests, they are 35% less likely than the average adult to follow their favorite brands on social media, and 14% less likely to use mobile coupons. This group puts Environment first (100%); Brands (93%); and Convenience 92%); but is more sensitive to price at 90%, followed by service at 78%.
3. Deal Thrillers love to get deals, but don’t want to put in any extra effort to do so. They’re quite loyal to their favorite stores and brands and are convenience oriented. They want to visit as few stores as possible, but walk away with the product they want at a price that makes them feel like they got a deal. Retailers don’t need to constantly offer discounts to Deal Thrillers, but when they do they should require minimal effort on the part of the shopper.
Deal Thrillers put brands atop its shopping factor rankings (100%); environment (96%); Convenience (78%); Service (74%); and Price ranks last, carrying just 60% of the weight of brands as a factor.
4. Deal Takers are less-motivated shoppers who will accept a deal if it is offered, but are less likely to actively seek one out. Deal takers have the highest average discretionary spend of all of the segments, and they are well educated. So while sales and coupons may be a good tactic to attract this group, promotions must be well publicized, as Deal Takers are unlikely to be looking for them. Environment is the top factor for this group, followed by brands, convenience, price, and service.
5. Deal Indifferents aren't interested in deals at all. They don’t appear to enjoy shopping all that much. They’re less likely than the average adult to go shopping frequently, to spend long amounts of time browsing while in-store, and to be drawn by sales to stores they wouldn’t normally shop at. Brand and environment are the most-important factors to these consumers at 100%, ahead of convenience (87%), price (70%), and service (68%).
6. Deal Rejectors also aren't interested in deals at all. They know what they want. They rarely go shopping and when they do, they just get what they need and then leave. They would not make a good target audience for coupons given that they appear to be relatively insensitive to price. The top factors for Deal Rejectors are brands (100%), convenience (96%) environment (95%), Service (73%), and price the least important at 59%.
Bottom Line For Your Bottom Line:
It is critical for marketers to know who among their customers really wants a deal, who needs a deal and who outright rejects them. Knowing the difference will help in tailoring specific deals and discounts to meet consumer’s needs as well as increase profits by not giving deals to customers who don’t want them.
Regardless, retailers have to constantly keep in mind what is the BEST, MOST CORRECT price to charge for any product -- or conversely, how to discount it intelligently. That's where Competitive Pricing Intelligence Solutions come into the picture. Sophisticated Price Intelligence Solutions have so many more complex facets and functions than comparing prices with your competitors.
Two great observations by Marketing Pilgrim Cynthia Boris:
1. "… a lot of deal seekers have money and plenty of it. They're not looking for a deal in order to make ends meet, they simply feel better paying less…we have to stop thinking of deal seekers as penny-pinching extremists."
2. "The deal seeker you want is the one who will take the deal then add six more full price items to the cart… and then rave about your service to all 3,000 of her closest friends on Twitter."
*Experian's Deal-Seeking consumer segmentation was created using the Spring 2013 Simmons National Consumer Study, a comprehensive survey of 24,374 US adults that measures consumer lifestyles, attitudes, brand preferences, media use, and more. Click for Experian's full report.