Customers Seek Deep Discounts
Consumers are spending more time comparing prices online and are more likely to "shop hop" for better deals, according to a survey by NCR Corporation.
The survey of 500 people by the Dayton, Ohio-based maker of ATMs and other self-service machines found that consumers are more frequently using the Internet as part of their shopping strategies. Fifty-three percent are researching products and prices online more often. Forty-six percent want to receive price comparisons, coupons, and information about sales and promotions online or through email.
Consumers are actively pursuing the best deals—49 percent are switching between retailers for the best value, while 80 percent are buying sale or discounted merchandise.
But this aggressive search for discounts is creating a problem for many retailers.
Holiday discounts aren't new, but sales usually bring in customers who buy higher-margin items, according to Aradhna Krishna, a professor of marketing at the University of Michigan's Stephen M. Ross School of Business. Revenues dropped this year as consumers cherry-picked the best deals.
Krishna says the best response will be creative promotions, rather than more steep discounts.
"The thing for retailers is to try to attract customers with more surprising or interesting promotions, so they aren't discounting so much, so the margins are higher," she said.