Big disconnect between senior execs and consumers on this issue
When it comes to pricing, senior-level retail executives are not exactly in tune with consumers.
Nearly 40% of consumers ranked pricing as one of the most important factors in purchase decisions, compared to only 20% of retail executives in a new survey by global technology company First Insight. Both groups, however, named quality as the most important factor (about 50% on both sides) in the purchase decision.
Also, only 20% of senior retail executives felt that consumers believed prices were increasing online, compared to more than half (51% ) of consumers who reported feeling they were. The same percentage (20%) of senior retail executives also felt consumers believed that prices were increasing in-store, compared to 60% of consumers.
“While everyone agrees that quality of products is the most important factor in purchase decisions right now, these data show consumers are more concerned with pricing than many senior decision makers in the retail industry suspect,” said Greg Petro, CEO and founder of First Insight. “The impact of this disconnect will only continue to grow as prices rise due to tariffs. Retailer and brand decision makers need to understand consumers’ perceptions to ensure they are able to continually attract today’s consumers with the right price-value equation.”
The survey also suggested that while the majority of retail executives felt mobile was the technology having the greatest impact on their business (80%), almost no executive acknowledged the impact of smart speakers. Meanwhile, the number of consumers who said they own smart speakers was up 75% to 42% of respondents when compared to a similar survey last December. The majority of consumers who own smart speakers are using them to research prices (59%), a significant increase from last year (49%).
Other survey findings include:
• Consumers still shopping more in-store: Seventy percent of senior retail executives believe consumers make more purchases in-store than online. In reality, consumers surveyed make about 60% of purchases in-store, versus 40% online.
• Senior retail executives are underestimating importance of in-store discounts and better pricing to consumers: Although 36% of consumers ranked price promotions, coupon availability or better pricing as one of the top three factors making them want to shop in physical stores versus buying products online, the survey found that only 12% of retail executives ranked these factors as important to consumers.
Both consumers and senior retail executives agreed that being able to see, touch and feel the product ranked the most important (36% by consumers, and 44% by executives). Being able to take a product home immediately was named as a top-three factor by 41% by consumers, and by 59% of executives.
• Consumers are shopping on mobile devices less often than executives think, but consumers are increasing shopping on mobile devices overall: Seventy-eight percent of senior executives believe that consumers are shopping on mobile devices occasionally to very frequently (six or more times a month), but only 47% of consumers reported shopping that often. But the number of consumers who are making one or more purchases online per month via mobile is increasing.