Such A Deal

According to analysis by Experian Marketing Services, retailers have increasingly moved from more seasonal discounts and sales to endless promotions. And retailers give deals to those who don’t need or seek them, ultimately missing out on profits that were theirs for the taking. In fact, when asked how important certain factors are when selecting a retailer, price ranks behind other key factors like store environment and brand names, reinforcing the argument that many consumers are willing to pay more, provided their other needs are met.

The study found that there are six distinct types of deal seeking consumers, ranging from Deal-Seeker Influentials to Deal Rejectors.

  • Deal-Seeker Influentials: Always seeking the best deal online, offline and mobile   18%
  • Offline Deal Seekers: Avid deal seekers through more traditional media   13%
  • Deal Thrillers: Always seeking the best deal, but prefer offers from their favorite stores   14%
  • Deal Takers: While not actively seeking a deal, they will take one when offered and even shop a new store to get one   12%
  • Deal Indifferents: Lacking in shopping enthusiasm in general, Deal Indifferents are unlikely to change their behavior because of a deal   34%
  • Deal Rejectors: The most deal-averse group, they want convenience overall   8%

When consumers are asked how important factors are like a store’s environment, the brands it carries, convenience, price and service when shopping, price regularly ranks either fourth of fifth among even the most deal-obsessed segments, demonstrating that many consumers are willing to pay more, provided their other needs are met, says the report.

Each segment ranks five shopping factors, from most important to least. For each segment, the percentage of each factor indicates its importance relative to the top-ranked factor. For instance, among Offline Deal Seekers, a store’s environment is the most important, but price, despite ranking fourth, is still significant carrying, 90% of the weight as Environment. Among Deal Rejectors, however, price carries only 59% of the importance of brands, this segment’s top factor.

Factor Importance And Degree Of Importance

 

Environment

Brands

Convenience

Price

Service

Deal-Seeking Influentials

100%

93%

80%

73%

68%

Offline Deal Seekers

100%

93%

92%

90%

78%

Deal Thrillers

100%

96%

78%

74%

60%

Deal Takers

100%

94%

82%

75%

66%

Deal Indifferents

100%

100%

87%

70%

68%

Deal Rejectors

100%

96%

95%

73%

59%

Source: Experian, January 2014

Deal-Seeker Influentials

Always seeking the best deal and the next hot thing

Deal-Seeker Influentials tend to be younger consumers who love shopping and are very interested in getting a good deal. In fact, 100% of this segment agreed with the statement “I am consumed with getting the best deal for a product or service.” One of the reasons this segment may be so deal oriented is that many in this group grew up during the rise of popular deal platforms like Groupon.com — thus, they not only enjoy coupons and sales, but have come to expect them.

Shopping attitudes of Deal-Seeker Influentials (Index: All Adults=100)

Attitude

Index

I often use the Internet to help plan my shopping trips

229

I am usually the first among my friends to shop at a new store

208

Because of a coupon, I'd be drawn to a store I don't normally shop

197

I shop around a lot to take advantage of specials or bargains

161

I tend to buy things on the spur of the moment

138

Source: Experian, January 2014

Deal-Seeker Influentials are very active on the Internet and social media, especially when it comes to posting about their favorite brands and products. They are almost 2.5 times more likely than the average American to say that they trust the information they see about products on social media, and to actually purchase a product when they have seen it advertised on social platforms.

These consumers are more than twice as likely to say that their friends come to them for advice about brands and products, both in person and online. They are trendsetters and like to try new products before their friends. Deal-Seeker Influentials are relatively young, with 41% between the ages of 18 and 34. They also tend to be highly educated, with 39% holding a college degree

As the Deal-Seeker Influential is always looking for a good deal, offering coupons is a very effective strategy since they use coupons from all different channels at higher than average rates, especially coupons from the Internet and email (46% more likely), in-store handouts (26% more likely), and magazines (20% more likely). In addition, 25% of these consumers have used a mobile coupon compared with about 15% of the general population.

Offline Deal Seekers

BOffline Deal Seekers are consumers who seek deals in offline and traditional settings. They make up the oldest segment, with half being over the age of 55 and 26% are retired. They are highly social, make friends easily and have friends and acquaintances from all walks of life. However, their influence declines in the digital domain, as they are less likely than average to engage in social media.

Shopping attitudes of Offline Deal Seekers (Index; All Adults=100)

Attitude

Index

I tend to hold out on buying things until they go on sale

158

I am drawn to stores I don't normally shop by sales

145

People often copy what I do or wear

133

Price isn't the most important factor - it's getting exactly what I want

86

I like to follow my favorite brands on social networking websites

65

I am more likely to buy products I see advertised on social media

46

I often use the Internet to help plan shopping trips

21

Source: Experian, January 2014

Offline Deal Seekers segment is most sensitive to price, with 43% agreeing that they are highly consumed by getting the best deal. Deal seeking may be more of a necessity for this segment given that its members tend to be older and retired, looking to keep the costs of everyday items low. 63% of Offline Deal Seekers head straight to the clearance rack when they enter a store.

Still, they like to shop at a variety of stores and spend a lot of time browsing. They state they only go shopping when they need something, but shopping is also a social activity, as they say they like to go shopping with friends. But they have their limits; these consumers don’t see much value in shopping at specialty stores and are generally unwilling to travel far to shop at a store, even if it’s an outlet.

As frequent deal hunters, these consumers use printed coupons from most sources at rates well above average. They are much less likely to use coupons from the Internet, email or a smartphone. They don’t typically use the Internet to compare prices or plan their shopping trips. Their primary motivation for using coupons is to save money, but likely to say that coupons are a way for them to try new products.

66% of Offline Deal Seekers are female, and they have the lowest average household income of the deal-seeking segments at $65,479 annually (24% below average). However, their strong propensity towards browsing in-store and their deal-seeking nature make them an attractive segment for brick-and-mortar retailers.

Deal Thrillers

Deal Thrillers are 100% consumed with getting the best deal. However, these shoppers are 57% less likely than the average population to say that a coupon or sale would encourage them to try a new store. And, they don’t want to put in any extra effort to do get a deal. They’re quite loyal to their favorite stores and brands and are convenience oriented. What they really want is 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.

Deal Takers

Deal Takers are less-motivated shoppers who will accept a deal if it is offered, but are less likely to actively seek one out. In fact, none of the members of this segment said that they are consumed with getting the best deal for the products or services they purchase.

Though Deal Takers are not looking for the best deal, they are 24% more likely to try a new store if they are offered a sale and 21% more likely to try a new store if they have a coupon. Promotions must be well publicized, as Deal Takers are unlikely to be looking for them. Social media may be a good medium for spreading the word, since this segment is often influenced by social interactions, both on- and offline.

Deal Indifferents

Deal Indifferents make up almost 30% of the adult population, and they under-index on almost every shopping attitude and behavior. 60% of these consumers agree that they only go shopping when there is something specific they really need, and none reported being consumed by finding the best deal on a product or service. Their shopping attitudes seem rather indifferent, and they are unlikely to change their behavior based on sales or discounts.

Deal Rejectors

Some consumers are not only deal indifferent, they’re Deal Rejectors. For these shoppers, convenience, service and brands far outrank price when it comes to making purchase decisions. Deal Rejectors are 40% more likely to say that they rarely go shopping and 26% more likely to agree that when they do go shopping, they just get what they need and then leave.

Deal Rejectors don’t view shopping as a social experience since they are 14% more likely to prefer shopping alone. Their purchases aren’t based much on what others will approve, nor does this segment consider themselves very influential on the purchases of others. They are 61% less likely than the general population to post about brands or products on social media websites and 59% less likely to trust information they receive through social media channels. Get in, get out: convenience rules.

For additional information from Experian, please visit here for the PDF file.

 

 

 

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