Retail service provider parago has released its second U.K. shopper study, "Let's Make a Deal." According to the company, the results reveal that regardless of income, shoppers now seek out the best prices and are willing to go out of their way to save even a small amount. Amid a lagging economy, new deal-seeking activities are becoming the norm among U.K. consumers, with high-value cashback rebate programs a top attractor.
Parago's study found that shoppers are using circulars, fliers and the Internet to research deals before they shop. Finding the best value is a practice now cemented in consumers' path to purchase due to several factors: greater price sensitivity; reduced perceived purchasing power; and easier access to deals on mobile phones, online and via social networks.
"Consumers of all income levels are feeling the pinch of the lagging economy. As a result, deal seeking has become an ingrained habit among U.K. shoppers," said Lindesay Brown, parago managing director for the U.K. "Our research also revealed that because consumers are focused on the very best price, the majority are finding that cashback rebates deliver the greatest value, vs. other promotions."
Key findings from the research include:
- Price sensitivity is up: Nearly three out of four shoppers are more sensitive to price this year due in part to the feeling among 44 percent of those surveyed that their purchasing power has decreased.
- Shoppers will got out of their way for discounts: More than 75 percent of consumers would drive 5 to 10 minutes out of their way for a £10 discount on a £50 product. A full 93 percent of shoppers would drive 5 to 10 minutes out of their way for a £20 cashback discount.
- Price is the top purchase influencer: The large majority of shoppers (65 percent) report that price is the primary influencer on purchase decisions, above store (13 percent), quality (12 percent) and other factors.
- Preference for cashback rebates is growing: When given the option of a lower-value instant discount or a cashback rebate, the majority of consumers prefer the rebate. This is a strong win for marketers, as the instant discount and cashback rebate have the same net promotional cost. Additionally, most shoppers are interested in seeking out rebates (72 percent) and feel they offer great savings opportunities (79 percent).
- Deal-seeking behavior is booming: Before shopping, 90 percent of consumers look online for the best deals and 89 percent look for sales, deals, cashback rebates and best advertised prices.
- Demand for deals in social networks: one out of three shoppers would participate in a social media contest to receive an exclusive cashback rebate.
The shopper behavior study was conducted via a national online survey during January 2014 with more than 560 respondents representative of the U.K. in terms of education, income and gender.
Read more about consumer behavior.