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At a time when shoppers can compare costs with the click of a button, even the affluent are eager to save a dollar.
Among shoppers making more than $100,000 a year, 42% frequently patronize discount retailers as compared to 27% who favor sellers who charge full price, says a new survey from First Insight, a technology company that helps retailers make better product investments and pricing decisions.
Shoppers are turning to Amazon, clicking on their mobile devices and even quizzing Alexa — the virtual assistant connected to Amazon’s smart speaker — to determine where they can find the best deal. Among more affluent respondents, 36% said their shopping for bargains had increased.
“Clearly the industry has educated the consumer to look for sales,” says Greg Petro, First Insight’s CEO. And “consumers by and large are using technology that they control … That device can provide them information and guidance on where the values are.”
The bargain-hunting is happening online as well as in actual stores, with 21% of higher-income shoppers preferring to check out discount sites. That’s significantly more than the 12% of shoppers overall who said they had a similar preference.
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Most —74% — of higher-income Americans go to Amazon first to check how much a desired item costs, as compared to 60% of all shoppers. But the desire to save money continues even on Amazon.com, where 61% of higher-income shoppers said they had bought more items from the e-commerce giant in the past year than before, but 80% said they wouldn’t pay extra for two-day shipping.
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Roughly half of upper-income Americans who had a smart speaker such as the Amazon Echo or Google Home used it to compare the prices charged by different retailers for the same item. And once they’re in an actual store, 39% click on their tablets or smartphones to figure out where they can get the best price, as compared with 26% of shoppers overall.
But as they chase price-conscious customers, retailers would be better-served offering unique items that they can sell for a slightly higher price than trying to beat competitors by charging the cheapest price.
“To continue to cut prices to drive sales … can be a short-term gain, but it’s a non-sustainable business model,’’ Petro says. “Retailers, brands and manufacturers need to create unique products, and then they have to offer them at the proper prices based upon how the consumer responds to it … But it doesn’t necessarily mean you have to start out at a low price point.”