Affluent consumers are becoming more price sensitive when it comes to embracing industry disruptors like artificial intelligence, Amazon and mobile technology to compare prices.
A study by First Insight revealed that 42% of affluent shoppers now frequently shop at discount retailers versus 27% at full price retailers. Thirty-six percent say their discount shopping has increased. Twenty-one percent of affluent respondents reported they were more inclined to visit online discount retailers, compared to 12% of overall respondents.
“The results of the survey found that industry disruptors are impacting the way affluent consumers and changing the way they make purchase decisions, said Greg Petro, CEO and Founder of First Insight. “A growing number of affluent consumers shopping at discount retailers over full priced retailers is an important finding, as it indicates they have already become more price sensitive.” “It is more critical than ever that retailers and brand offer differentiated products at the right price in order to attract the informed, affluent shopper on the hunt for deals both in-store and online.”
A vast majority of affluent consumers (74%) check Amazon for products and pricing before looking anywhere else, versus 60% of overall consumers. It is likely driven by the affluent shopper’s view that product pricing online is better. Half of affluent respondents felt that prices of products in physical retail stores are increasing, while slightly less (46%) felt online retail stores’ pricing was increasing.
While 61% of affluent respondents said their number of Amazon purchases increased in the past year, 80% said they were unwilling to pay more for two-day shipping, underscoring growing sensitivity to prices.
The survey revealed that 40% of affluent respondents own a smart speaker such as Amazon Alexa or Google Home, compared to only 24% of overall survey participants. These two smart speakers are the most popular among affluent shoppers, owned by 24% of respondents. More than half (53%) of affluent users are utilizing their smart speakers AI technology to research pricing, with the most popular items being electronics (65%), apparel (48%), shoes (42%), home appliances (38%) and jewelry (31%).
Affluent shoppers are also much more likely to price compare using mobile devices while at full-priced retail stores. The study found that 44% of respondents (compared to 38% overall) are more likely to price compare at full priced retail stores, while only 19% are more likely to price compare at discount retailers (versus 15% overall).
Some favorite discount retailers include TJ Maxx (30%), Marshalls (28%) and HomeGoods (23%).
Thirty-nine percent of affluent shoppers are using their mobile devices to price compare while in-store, compared to only 26% overall, and the need is growing. The result of the study indicated that more than half (52%) of affluent respondents noted that their need to price compare while physically in-store is increasing versus 46% overall.
While the affluent are price checking in-store, the survey found that the two most important factors that would make them want to shop in a physical store versus buying online are being able to see and touch the product (36%) and being able to take a product home (26%). Price promotions and coupon availability were important to only 10% of affluent respondents, and only 12% said they felt they’d find better prices in-store, compared to 17% overall.