According to a new report by Power Retail, only a minority of Aussie shoppers are willing to pay full price online. Are retailers slaves to discount-demanding consumers or have they actually created them. Most importantly: what now?
For most Australians, bagging a bargain is one of the most important aspects of their online shopping journeys. With this in mind, it’s not surprising that a number of local and international brands are starting to feel the heat, with most retailers offering sales on a regular basis.
Interestingly, purchasing during sales and price checking the same product through multiple outlets are two of the biggest discounting activities consumers engage in, according to Power Retail’s latest Spotlight Series report: ‘Discounting: A Race to the Bottom?’
The report, which was released just last week, found that Australian consumers are more likely to make a purchase when the goods they’re looking at are on sale (73 percent), while 24 percent reportedly believe bagging an online bargain is better than sex.
“Statistically speaking, this means one of two things – online bargains have reached orgasmic levels, or the Australian bedroom performance index has hit rock bottom,” jokes Power Retail’s Managing Director, Grant Arnott.
“The most frightening statistic for retail is that only one in four online shoppers is prepared to pay full price online – 73 percent of online shoppers stated that most or all of their online purchases are on discounted items,” he added.
“The genie is well and truly out of the bottle when it comes to discounting, with the overwhelming majority of shoppers now conditioned to purchase only when items are on sale.”
Further to the alarming number of shoppers that now refrain from purchasing full price items, 80 percent of shoppers also engage in online price checking, with 49 percent of shoppers checking prices at two or more competitors before finalising a purchase.
According to Arnott, this is representative of the wider industry, as competition steepens and shopping online becomes more convenient and affordable for the majority of Australians. This is especially the case when retailers are forced to offer extra services such as free shipping and free returns on goods that are already being sold with lower margins.
“[These] are no longer perceived by shoppers as value-adds, but instead are expected to be baked into the purchase price. The pressure on profitability is extreme,” he said. “It’s dire enough for the retail sector, and the discounting race to the bottom is only going to accelerate failure if left unchecked.”
How can retailers race ahead of competitors and remain competitive in the modern retail era where discounting pressure is a major concern? Power Retail’s report claims that discounting alone is unsustainable and that businesses should also be tailoring their product offerings and experiences to their customers’ needs.
Arnott recommends that this is then backed up by strong customer service and being more strategic when getting involved in online sales events such as Click Frenzy and Black Friday.
Want to learn more about how savvy shoppers are looking for a bargain online? Download the latest report in our Spotlight Series titled Discounting: A Race to the Bottom? here now.
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