• Share
  • Email
  • Embed
  • Like
  • Private Content
Dynamic Pricing in a Smartphone World: A Shopper Showrooming Study
 

Dynamic Pricing in a Smartphone World: A Shopper Showrooming Study

on

  • 186 views

The new study by parago, Dynamic Pricing in a Smartphone World: A Shopper Showrooming Study, delves into — and breaks down — the statistics and behavioral trends that are stealing away ...

The new study by parago, Dynamic Pricing in a Smartphone World: A Shopper Showrooming Study, delves into — and breaks down — the statistics and behavioral trends that are stealing away retailers’ brick-and-mortar customers.

We found in this study that showrooming, the practice of comparison shopping on a smartphone while in-store, is up 400% over last year, and this consumer shopping behavioral shift is occurring across all income levels and retail categories. Amazon is the #1 way US consumers compare prices on their smartphones at physical stores. Not only is Amazon #1, but it is used for showrooming twice as often as the #2 option, Google.

There is, however, a silver lining: When a retailer matches e-tailer prices with rebates, customers will buy in-store.

parago creates engaging solutions that inspire actions & impact results As the most comprehensive single-source provider of incentives and engagement, we deliver $2 billion in rewards to 50 million people worldwide each year using our advanced technology. Our relentless focus on innovation drives better results, making us the smart choice.
• consumer rebates & promotions
• employee rewards & recognition
• sales & channel management
• energy efficiency incentives

Statistics

Views

Total Views
186
Views on SlideShare
186
Embed Views
0

Actions

Likes
0
Downloads
8
Comments
0

0 Embeds 0

No embeds

Accessibility

Upload Details

Uploaded via as Adobe PDF

Usage Rights

© All Rights Reserved

Report content

Flagged as inappropriate Flag as inappropriate
Flag as inappropriate

Select your reason for flagging this presentation as inappropriate.

Cancel
  • Full Name Full Name Comment goes here.
    Are you sure you want to
    Your message goes here
    Processing…
Post Comment
Edit your comment

    Dynamic Pricing in a Smartphone World: A Shopper Showrooming Study Dynamic Pricing in a Smartphone World: A Shopper Showrooming Study Document Transcript

    • DYNAMIC PRICING IN A SMARTPHONE WORLD A SHOPPER SHOWROOMING STUDY JULY 2013
    • CONTENTS introduction 3 methodology 5 key discoveries 6 compare and buy from e-competitors 7 Amazon is #1 8 price is king 9 showrooming price elasticity traditional retailers can beat Amazon 11 key insights by income dynamic pricing in a smartphone world 10 12 a shopper showrooming study by parago 2
    • AMAZON IS WINNING THE WAR IN-STORE dynamic pricing in a smartphone world a shopper showrooming study by parago 3
    • INTRODUCTION OUR STUDY UNCOVERS HOW RETAILERS CAN BEAT AMAZON Sophisticated e-tailers are using dynamic pricing models, which are real-time price adjustments based on market demands, consumer behaviors, competitive insights and other data centric factors, coupled with the explosion of smartphones to steal customers while they are shopping in store. We found in this study that showrooming, the practice of comparison shopping on a smartphone while in-store, is up 400% over last year. Amazon is the #1 way US consumers compare prices on their smartphones at physical stores. Not only is Amazon #1, but it is used for showrooming 2x more than the next option, Google. Showrooming is occurring substantially across all income levels and retail categories, even those often assumed immune from it, such as auto parts. Additionally, a price difference of just $5 in many cases can sway the purchase decision to Amazon. 56% of adults 18+ now have a smartphone, according to the Pew Internet Study conducted in May 2013. Our study finds 58% regularly showroom and buy e-tailer products while in brickand-mortar stores from their smartphones or go home and buy them online. That means at this moment, 1/3 of all adult shoppers regularly showroom. They’re choosing competitors’ products on their smartphones while in-store. The numbers are quickly growing as smartphone penetration continues its steady rise. Customer shopping behaviors have fundamentally changed. The combination of smartphone use and savvy e-tailer tactics is enabling customers to work around these traditional retail strategies: special sales, exclusive merchandise, unique SKU numbers, and one-of-a-kind experiences and services. That’s because consumers are being trained to look past exclusivity and service by e-tailers that have the ability to offer similar items at a much better prices with personalized service and experience that most consumers rate as good as brick-and-mortar stores. Some good news for brick-and-mortar retailers: a silver lining was uncovered in this study. The findings clearly show when a retailer matches e-tailer prices with rebates, which provide healthier margins than instant discounts, the majority of consumers will shop and buy from the store more often, across all incomes levels and retail categories. The results of this national study will profoundly change your understanding of the market. Dynamic pricing models, designed to steal traditional shoppers on their phones while they are in-store, are getting smarter every day. Retailers that acknowledge the reality of the situation and find strategies both in-store and online — such as dynamic price match rebates — will be the ones best prepared to win in the long run. We invite you to join us in the discussion. Please share your thoughts, insights and questions as we continue to closely monitor in real-time the most dynamic shift in retail that has ever occurred. Good shopping! Rodney Mason, CMO rodney.mason@parago.com 972.538.7336 http://twitter.com/rodmoose dynamic pricing in a smartphone world a shopper showrooming study by parago 4
    • METHODOLOGY objective gender 53% female 47% male Determine how frequently customers showroom, buy from e-competitors on their smartphones, and the price differences that sway them to do so. respondents 1,043 housing situation smartphone owners surveyed via a national, online study conducted in June 2013. annual household income 66% own 34% rent age 5% 18–22 5% $100,000–$199,000 17% 23–29 18% $50,000–$99,999 39% 30–39 32% $20,000–$49,999 28% 40–49 22% < $19,999 9% 50–59 16% did not disclose 3% 60+ $200,000+ marital status educational background married 59% widowed 2% divorced 9% separated 2% never married 28% geographic region 5% Mid-Atlantic 17% East North Central 15% South Atlantic less than high school 1% high school diploma 14% some college 25% associates degree 15% bachelors degree 32% graduate degree 13% employment status New England West North Central 7% 5% 22% employed full time 39% employed part time 36% not employed, looking for work 7% 9% East South Central 4% not employed, not looking for work West South Central 9% retired 4% Mountain 5% disabled/not able to work 5% Pacific 20% dynamic pricing in a smartphone world a shopper showrooming study by parago 5
    • KEY DISCOVERIES Amazon is the #1 way customers compare prices on their smartphones— 2x more than Google Most smartphone owners showroom regularly in $ $5 price difference every major shopping category, including automotive and hardware on a $50 product tips the scales in Amazon’s favor 56% of smartphone owners shop in stores and regularly buy competitive products on smartphones while there 58% of smartphone owners shop in brick-and-mortar stores and regularly compare price on their smartphones while in store and then decide to buy online later Price is the most important smartphone research factor, but customer reviews also rank high dynamic pricing in a smartphone world Customers will shop and buy more often from a store that matches online competitors’ prices with rebates a shopper showrooming study by parago 6
    • COMPARE AND BUY FROM E-COMPETITORS 58% 41% re rs compa of shoppe ery product ev prices in how small o matter ange, n r $20 23% compare prices on items over $20 of these shoppers $50 21% compare prices on items over $50 66% $100 14% compare prices on items over $100 of smartphone owners use their phones to compare prices while in-store compare prices weekly 26% compare prices monthly 8% compare prices a few times a year Retail categories in which customers regularly check out items in-store, but buy online often sometimes never apparel 50% 47% appliances 31% 58% automotive 20% 56% 58% Showroomers who regularly buy an item on their smartphones while comparing prices in-store 2 9% weekly 2 7% monthly 2 4% a few times a year 20% never Showroomers who regularly buy an item online (not on a smartphone) after comparing prices in-store 2 6% weekly 3 2% monthly 3 6% a few times a year 6% never dynamic pricing in a smartphone world 47% building tools & supplies 30% 45% electronics & mobile technology 50% 46% entertainment 54% 40% housewares 42% 51% office supplies 39% 50% a shopper showrooming study by parago 7
    • AMAZON IS #1 Amazon is the number-one way consumers compare prices on their smartphones Amazon 56% Google 26% 24% 36% apps 18% 92% 84% 75% 22% 39% comparison websites 13% total 22% 35% customer ratings 15% social media 11% freqently moderately 12% most 78% 24% 37% 77% 27% 23% 55% 21% 46% are Amazon Prime members with special perks, including free shipping 50% 42% 50% of male respondents 42% of female respondents 76% 76% of households with $200,000+ annual incomes 61% 61% of households with $100,000–$199,999 annual incomes Amazon price comparison use by household income $200,000+ $100,000– $199,000 $50,000– $99,999 $20,000– $49,999 < $19,999 most 71% 64% 56% 50% 50% frequently 20% 23% 28% 22% 16% moderately 4% 7% 10% 17% 14% total 95% 94% 94% 89% 80% Google price comparison use by household income $200,000+ $100,000– $199,000 $50,000– $99,999 $20,000– $49,999 < $19,999 most 26% 28% 24% 24% 39% frequently 51% 36% 35% 41% 18% moderately 16% 19% 36% 20% 23% total 93% 83% 95% 85% 80% dynamic pricing in a smartphone world a shopper showrooming study by parago 8
    • PRICE IS KING PRICE IS KING for comparison shopping on smartphones while in-store PRICE 46% CUSTOMER REVIEWS But CUSTOMER COMMENTS are also very important EXPERT REVIEWS SOCIAL is not significant for mobile search, but it can be a good tool to elevate customer comments and price messaging through search 13% PRODUCT INFORMATION 28% 11% 3% SOCIAL MEDIA PEER COMMENTS Most important factors when comparing products in-store on smartphones (1 = most important; 5 = least important) 1 2 3 5 4 best price 46% 17% 13% 20% 4% customer reviews 28% 30% 24% 14% 4% expert reviews 13% 22% 27% 29% 8% product information 11% 23% 17% 20% 29% 3% 8% 19% 17% 54% social media peer comments Most important smartphone comparison factors by household income $200,000+ $100,000– $199,000 $50,000– $99,999 $20,000– $49,999 < $19,999 best price 31% 43% 51% 47% 39% customer reviews 28% 36% 26% 27% 24% expert reviews 29% 13% 11% 10% 22% product information 10% 7% 11% 13% 10% 2% 2% 2% 3% 4% social media peer comments dynamic pricing in a smartphone world a shopper showrooming study by parago 9
    • SHOWROOMING PRICE ELASTICITY A $5 difference tips the scale for Amazon 63% would buy from Amazon if a $50 item in store were $45 on Amazon would buy from Amazon if a $50 item in store were $40 on Amazon would buy from Amazon when the price in store is $100 and an item that is not an exact match is $80 on Amazon savings = 20% / $20 would buy from Amazon when the price in store is $100 and not an exact match is $90 on Amazon savings = 10% / $10 would buy from Amazon when the price in store is $50 and not an exact match is $40 on Amazon savings = 20% / $10 55% 54% dynamic pricing in a smartphone world in-store Amazon 82% The higher the ticket price, the greater the propensity to jump to Amazon for a similar item that is not an exact match 79% $5 76% 91% would buy from Amazon if a $100 item in store were $90 on Amazon would buy from Amazon if a $100 item in store were $80 on Amazon A 5% discount on an item $500+ that is not an exact match, but is similar, can switch half of all shoppers to Amazon 50% would buy from Amazon when price in store is $500 and not an exact match is $475 on Amazon savings = 5% / $25 would buy from Amazon when price in store is $500 and not an exact match is $450 on Amazon savings = 10% / $50 would buy from Amazon when price in store is $500 and not an exact match is $425 on Amazon savings 15% / $75 78% 88% a shopper showrooming study by parago 10
    • MATCHING REBATE PREFERRED OVER AMAZON TRADITIONAL RETAILERS 67% CAN $40 on Amazon BEAT AMAZON $50 – $10 rebate in-store will buy at store over Amazon (female: 71% / male: 62%) 65% $75 on Amazon The majority of customers will shop and buy more often at stores that have Amazon price-match rebate guarantees will buy at store over Amazon (female: 69% / male: 61%) Consumer propensity to visit and buy more by retail category, when the retailer offers an in-store rebate that matches an online price visit more buy more visit more $100 – $25 rebate in-store 63% buy more $200 on Amazon apparel 56% 51% entertainment 50% $250 – $50 rebate in-store 48% appliances 48% 50% furniture 45% 45% automotive 42% 42% housewares 47% 48% building tools & supplies 40% 43% office supplies 46% will buy at store over Amazon (female: 67% / male: 58%) 47% 62% $400 on Amazon electronics & mobile technology 52% 55% toys 43% 40% $500 – $100 rebate in-store will buy at store over Amazon (female: 65% / male: 58%) dynamic pricing in a smartphone world a shopper showrooming study by parago 11
    • KEY INSIGHTS BY INCOME 59% of households with $200,000+ annual incomes buy on their phones weekly while in-store All income levels up to $200,000 buy on their smartphones while in-store as much or more than on computers or other devices How often do you visit a store to check out a product and buy it on a smartphone while you’re there? $200,000+ $100,000– $199,000 $50,000– $99,999 $20,000– $49,999 < $19,999 every week 59% 30% 26% 27% 33% at least once per month 14% 31% 28% 28% 22% a few times per year 24% 21% 27% 24% 19% How often do you visit a store to check out a product and buy it online (but not on a smartphone) instead? $200,000+ $100,000– $199,000 $50,000– $99,999 $20,000– $49,999 < $19,999 every week 65% 27% 26% 24% 31% at least once per month 12% 34% 32% 34% 21% a few times per year 20% 35% 38% 38% 34% dynamic pricing in a smartphone world a shopper showrooming study by parago 12
    • KEY INSIGHTS BY INCOME The higher the income, the greater the propensity to switch to Amazon to save $5 on a $50 item $200,000+ $100,000– $199,000 $50,000– $99,999 $20,000– $49,999 < $19,999 SAVE $5 on a $50 item 73% 66% 62% 62% 51% $10 on a $100 item 82% 79% 75% 76% 69% $50 on a $500 item 82% 85% 84% 86% 74% Switch to Amazon to save on a similar item, even though it’s not an exact match $200,000+ $100,000– $199,000 $50,000– $99,999 $20,000– $49,999 < $19,999 SAVE $10 on a $50 item 61% 49% 44% 45% 49% $20 on a $50 item 68% 53% 50% 52% 51% $20 on a $100 item 50% 59% 62% 60% 51% $25 on a $500 item 49% 50% 49% 53% 44% $50 on a $500 item 71% 72% 73% 76% 60% $75 on a $500 item 82% 85% 87% 86% 51% The majority of customers will shop and buy more at stores with Amazon price-match rebate guarantees Will buy from a brick-and-mortar store with the following Amazon price-match rebate savings $200,000+ $100,000– $199,000 $50,000– $99,999 $20,000– $49,999 < $19,999 SAVE $10 on a $50 item 57% 64% 68% 70% 63% $25 on a $100 item 63% 63% 67% 65% 66% $50 on a $200 item 55% 57% 64% 65% 69% $100 on a $500 item 61% 55% 62% 64% 67% dynamic pricing in a smartphone world a shopper showrooming study by parago 13
    • KEY INSIGHTS BY INCOME Propensity to visit and buy more by retail category, when retailer matches online price with a rebate $200,000+ $100,000– $199,000 $50,000– $99,999 $20,000– $49,999 < $19,999 visit more buy more visit more buy more visit more buy more visit more buy more visit more buy more apparel 59% 47% 55% 60% 57% 50% 57% 51% 57% 49% appliances 51% 49% 46% 56% 48% 51% 52% 47% 46% 41% automotive 43% 47% 43% 47% 44% 45% 43% 39% 38% 32% building tools & supplies 39% 49% 38% 49% 41% 43% 43% 42% 38% 23% electronics & mobile technology 57% 47% 53% 60% 54% 56% 51% 56% 56% 39% entertainment 55% 37% 48% 55% 49% 46% 51% 48% 52% 41% furniture 33% 57% 48% 49% 46% 47% 46% 42% 44% 32% housewares 51% 47% 42% 55% 48% 47% 45% 48% 59% 39% office supplies 53% 47% 49% 54% 45% 46% 44% 47% 44% 47% toys 63% 37% 45% 43% 42% 41% 43% 39% 41% 38% dynamic pricing in a smartphone world a shopper showrooming study by parago 14
    • parago creates engaging solutions that inspire actions & impact results. As the most comprehensive single-source provider for incentives and engagement, we deliver $2 billion in rewards to 50 million people worldwide each year with advanced technology. Our relentless focus on innovation drives better results, making us the smart choice. consumer rebates & promotions | employee rewards & recognition | sales & channel management CONTACT Rodney Mason Chief Marketing Officer rodney.mason@parago.com 972.538.7336 www.parago.com © 2013 parago, inc. All rights reserved.