Shoppers are no longer willing to pay full price as deep discounts influence consumer behavior.
That is one of the key findings of a new consumer report by First Insight, which found that widespread discounting by department stores and mass merchants is significantly influencing the expectations of discounts when consumers shop in other product categories.
The study found that while expectations are similar across genders, they vary by age, with baby-boomers expecting deeper discounts than millennials and Gen-Xers. Indeed, 76% of baby-boomers will not pay full price when shopping for home electronics, home appliances, furniture, smartphones and vehicles, according to the first in a series of reports by First Insight. The survey results were announced Monday during Shoptalk in Las Vegas.
“The results of this survey indicate that the rampant discounting that has become the norm in department stores and mass merchants has had a clear impact on consumers and the way they now consider purchases in every aspect of their lives,” said Greg Petro, CEO and founder of First Insight. “In categories ranging from home electronics to automobiles, a vast majority of Baby Boomers and Gen-Xers are less likely to consider purchasing at full price, with Millennials less impacted by discounts overall. This is an incredibly useful finding, and retailers need to be aware of these shifting expectations within their target audiences in order to compete, while still maximizing profits and sales. It’s a delicate balance.”
Additional findings of the survey include:
• Consumers expect discounts every time they shop
Ninety percent of all consumers surveyed acknowledged that discounts in department stores and mass merchants significantly influenced, or somewhat influenced, their expectations for discounts in home electronics. Similar expectations were shared by consumers shopping for home appliances (88%), furniture (86%), smartphones (83%) and vehicles (80%).
• Baby-boomers are least likely to pay full price.
The vast majority of baby-boomers surveyed expect some level of discount in order to consider a purchase. Across every category including vehicles, smartphones, furniture, and home appliances, more than 70% of baby-boomers said they would ‘definitely not’ or ‘probably not’ purchase an item in these categories at full price, with an even higher 79% stating a discount would likely be necessary when purchasing home electronics.
• Discounts have less impact on millennials.
Less than half of millennials stated they would ‘definitely not’ or ‘probably not’ buy vehicles (39%), furniture (40%), home appliances (42%) and home electronics (41%) at full price. Only 35% would be less likely to buy a smartphone at full price.
• Deepest discounts expected in electronics, home appliances and furniture.
Roughly 80% of all respondents reported they would ‘definitely’ or ‘probably’ buy a product that met their needs at the deepest discounts suggested by the study in categories of home electronics, home appliances and furniture.
However, deep discounts showed a significantly lower impact on purchase decisions surrounding smartphones and vehicles with only 66% and 55% of respondents saying they’d definitely or probably buy these products if deeply discounted, respectively.
Discount rates were selected based on discounts commonly observed within each category, with deep discounts in home electronics, home appliances and furniture at 40%, smartphones at 20% and vehicles at 15%.