There is a pricing revolution underway, and millennials are at the forefront of it. These young adults, as well as those who have quickly adapted to the digital era, are now considered as digital natives.
For this generation of shoppers, using technology is second nature, which is why it is having such a big impact on the retail industry, especially among those who like to search for a bargain.
Bargain hunt Britain
Brits have long enjoyed looking for a bargain, and recent research of 2000 people from across the UK shows that 85 per cent of people do some sort of bargain hunting when looking to purchase something. This figure increases to 95 per cent of people aged 16-24, showing a culture change where people are no longer content by taking the price at face value; they want to get the most out of their hard-earned cash.
The ways people go about their search for a deal is changing as well. Technology has made it easer for people to check prices. Gone are the days spent traipsing around the shops comparing items to find the best deal. With smart devices firmly integrated into modern life, finding the best offer has never been easier for the bargain-conscious shopper. Indeed, people regularly access the internet on their devices to use online comparison websites, online voucher codes and barcode scanning apps while they are out and about.
In fact, the survey found that half of shoppers will use a price comparison site when it comes to looking for a bargain, while 4 in 10 people will use a voucher code in order to save money. This increases to 55 per cent of people using comparison sites and 6 in 10 using voucher codes among the millennial generation.
Customers believe they can find deals
Part of this increase in the use of technology is not just to do with the convenience of it and the habits of the modern shopper, but it is also to do with the pricing of products. Consumers now know that if they spend a bit of time, they can save some money on the product that they want to purchase.
In fact, the average person will spend 29 minutes in-store looking for the best deal on a fashion item they want to buy, and in extreme cases, 1 in 7 people admit to spending more than an hour in-store looking for that bargain. Moreover, a quarter of shoppers believe that they can save between 6-30 per cent on average by shopping around online.
The trending rise of showrooming has only encouraged technology to be brought into the domain of the bricks-and-mortar stores as well. In fact, almost a quarter of 16-25 year olds admit to using a smart device, whether it is a mobile phone or a tablet, to purchase items online while still in-store. The boundaries between online and offline are becoming increasingly blurred and retailers need to take this into account when targeting customers nowadays.
The internet has bought unprecedented transparency to pricing. If retailers do not get their pricing strategy just right they risk losing business, as customers will just go elsewhere if they can find a better deal. People’s perceptions of a “good deal” are changing due to this, as they will feel they are overspending otherwise.
The future of retail
With this in mind, it seems more likely than ever that dynamic pricing will be the future of retail pricing. In the Uber era, consumers are already taking to the theory of dynamic pricing. Indeed, this approach has been used and accepted by the travel and leisure industry for many years. Whether it be applied to food and drink, or to the latest items of fashion clothing, dynamic pricing is a game-changer and puts retailers a step ahead of their competition, while keeping a balance on providing the consumer with a product at the price they are happy with.
For brands to survive and compete in such a busy market, they need to relook at their pricing and make sure that they are not out-pricing themselves from the competition, which encourages potential customers to look elsewhere. The younger generations of shoppers, who have grown up with the likes of eBay and Amazon, are becoming more strategic with their bargain hunting compared to previous generations, and what they are happy to pay is setting the standard for pricing in the future.
The technology is available to help retailers and if they do not react accordingly to match this consumer need, then they figure to lose business to their competition.
Markus Juhr-de Benedetti, Chief Revenue Officer at data analytics firm Blue Yonder
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