Despite a long and relatively steadily improving economy, consumers remain so focused on value that pricing remains retailers' most pressing business worry. New data shows just how much they are concerned.
An analysis of the prices of some 52,000 items by Profitero, an ecommerce analytics company, found that Amazon came in below the online prices offered by Walmart, Target, Jet.com and "specialist" retailers. On average, Profitero said, Amazon's prices were 11% lower across the 13 categories of products examined.
Although the Great Recession officially ended nearly eight years ago, its effect on consumer psychology continues to be felt. The latest evidence: A survey of shoppers finds widespread willingness to pick a quick-service restaurant based on a discount deal.
With price and discounts remaining consumers’ key purchase decision factors, retailers are racing to change the way they set prices and markdowns. Merchants are trying to navigate a narrow path: They don’t want to be undercut by competitors and lose sales, but they also don’t want to get caught in a “race to the bottom,” where price cutting becomes so extreme that margins disappear.
In yet another sign that pricing is the key driver in the current retail environment, a new study found that among Amazon shoppers, the single most commonly cited reason for making a purchase on the site is price.
A large portion of the retail sector is facing renewed pressure on pricing as the key driver to get shoppers to buy. Target became the latest to buckle under this new strain, conceding that it will compete aggressively on price amid disappointing results.