Results from Kibo’s 2017 Consumer Trends Report show that online shoppers are more obsessed with pricing and discounts than ever — but that doesn’t mean merchants have to destroy their margins in order to satisfy the need for savings.
The survey of more than 2,900 consumers across the U.S. and U.K. found that price was far and away the determining factor when it came to purchase decisions online. A whopping 70 percent of respondents said price was the chief determining factor when it came to deciding to buy at a particular website — dwarfing the next-most-important factor, the brand name, which came in at just 12 percent.
Similarly, when asked what would prompt them to leave a retailer they’re loyal to for a rival merchant, pricing was the most important factor for 68 percent of respondents. Another 42 percent said they’d switch sites to find lower delivery costs in their quest to keep order totals down.
This singular focus on pricing presents a challenge for most small- to mid-sized retailers. On the surface, it may seem impossible to compete with Amazon and other mass merchants who can make up margins through sheer order volume.
But while most merchants can’t compete on product price or relentless free shipping offers, they can use more creative ways to help shoppers realize savings — and recognize the value their brands represent. Among them:
Integrate price into product discovery: To help shoppers find products that align with their budgets, merchants should make price a crucial attribute for product discovery. Not only should shoppers be able to sort search results and product index pages by price from low to high, but they should be able to filter results sets according to price using faceted navigation. In addition, on-site search should accommodate keyword terms like “sale” and “promotion,” and browsers using site navigation should easily be able to navigate to discounted items, both through a standalone “sale” section and from within individual product categories.
Kibo merchant Stein Mart offers browsers and searchers multiple avenues for accessing bargains. In addition to sorting by price, shoppers can use faceted navigation to quickly view category matches under $30, sale products, and discount products, as well as to narrow the price range for the results set.
Enable custom pricing alerts, but test carefully: Personalization strategies tend to focus on automated product recommendations, whether on-site cross-sells or placements within tailored promotional emails. But shoppers can also set up their own personalized services, such as price drop notifications that alert them when products go on sale, or updates on new products that fall within their stated price range.
Merchants rolling out such initiatives should test them carefully, however, to ensure that they deliver truly relevant and accurate information. After all, automated business logic can trigger a price-drop alert for a five-cent adjustment, which is unlikely to make a difference to consumers in most cases and only serves to clutter their inboxes. And merchants with physical store outlets must ensure they can deliver price consistency both online and offline to match the alerts shoppers receive.
Communicate value with rich content. To encourage shoppers to think beyond the product price tag, merchants should highlight qualities that boost overall value — such as the uniqueness of their product assortments, product craftsmanship, standout customer service that supports purchases, and how-to expertise and other usage guidance. Services such as personal shopping and classes in stores, gift wrapping, and product customization (such as monogramming or personalized designs) are further offerings that add value beyond a discount, while promoting charitable activities in line with the target audience’s priorities can create affinity with the merchant brand.
Kibo merchant Sundance Catalog puts the spotlight on artisanship with an “Artists” link in global navigation that leads shoppers to browse artist profiles displayed alongside the items they create. Shoppers who access products via other routes can read abbreviated descriptions of the craftsmanship behind the items, and link to the detailed profiles. The artisan focus is also expressed on the merchant’s Pinterest outpost, which includes a board for Featured Artists, and Facebook page, where video profiles of long-standing artists receive plenty of views, likes, and shares.
Highlight potential savings on fulfillment options: Not every merchant can offer free shipping both ways in perpetuity — but they can highlight what cost savings are available through services such as buy online, pick up in store (BOPIS) or site-to-store shipping. Offering such flexibility is important to shoppers, the Kibo survey found, with two-thirds of participants saying having multiple fulfillment options is an important factor influencing purchase decisions.
Even further, merchants should consider whether to make transparent and accessible the savings accrued when shoppers select various options for assembling, packaging, and delivering items. As we outlined in a prior post on dynamic pricing, cutting-edge merchants such as Jet.com are rewarding shoppers who opt out of free returns or use a debit rather than a credit card with lower order costs — a practice others may do well to emulate.
What creative practices are you deploying that allow your business to compete on price?
Gain full access to all the research in the 2017 Consumer Trends Report by downloading the study here.