subject: Recession Shoppers Need Good Pricing And Good Service [print this page] As we all know, the past few years of economic turmoil have turned many peoples lives upside down around the world. These disruptions have resulted in considerable modification in spending habits. Even so, the data shows that there has been a steep decline in sales generated by traditional retail stores while online retail stores have seen stronger results.
According to a study commissioned by LinkShare, a provider of marketing networks, and conducted by PSB or Penn, Schoen & Associates, Inc., there is a cautious approach among customers regarding their purchasing decisions. People continue to prefer the Internet and are shopping from the comfort of their homes or workplaces.
Aptly termed as recession shoppers, this new breed of customers are constantly on the lookout for some of the best deals on offer online in order to cut down on their spending. As we analyze how online retailers can capitalize on recession, we find that many of them offer great deals including free shipping discounts, coupons, product price comparison online, product price slashing, buy one get one free kind of offers and various other interesting special promotions.
According to the PSB study, 70 percent of weekly shoppers and 64 percent of recession shoppers shopped for a particular product offered by a particular online retailer because of a discount offer or coupon.
There are also two other factors that add to the customer's preference for online shopping and enhance the opportunity for retailers to capitalize on recession. These are:
The choice available by virtue of the large number of online retailers selling products. Buyers have much more choice than they can possibly achieve in their own geographic shopping area. This means that online retailers have the opportunity and in fact must work to differentiate themselves from other sellers in order to succeed.
Online retailers develop personal relationships with their customers by sending periodic email alerts to customers regarding special promotions or discounts offered on their products. These emails are often customized based on historical purchasing preferences so that they appear less like the junk mail that arrives in the post and more like a special invitation from someone who knows them well.
The combination of the price advantage and personalization gives the online retailer an edge that traditional shops may not have.
The dilemma is that price competition may not work well for many small sellers who simply do not have access to the kind of volume discounts that more major retailers enjoy. If that is your situation, you need to do several things.
1.Keep your price as competitive as possible by working closely with your wholesaler, renegotiating when possible, taking advantage of special deals and so on.
2.Keep shipping costs low by using a shipping optimizing service.
3.Identify how you can use volume purchase to help you. For example, how much can you lower your price if you are guaranteed to sell three instead of one? (Three for one sale)
Once you have hammered the price as low as possible, focus on the personalization that gives you the special relationship with your customer. Much of the research shows that people do not necessarily buy the cheapest of they have other reasons to prefer a vendor such as trust or customer service.
