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PORT WASHINGTON, N.Y. -- When it comes to deciding where to shop, price trumps sales and special deals, customer service and convenience for the majority of U.S. consumers, according to a new study released today by market researcher The NPD Group.
Through its monthly Economy Tracker, NPD found that in its mid-March survey, 85 percent of U.S. consumers said price will be an "extremely important/important" factor in deciding where to shop in the near future -- 10 percent more than those who feel sales and special deals are important.
By income, 87 percent of those in the household income bracket of $25,000 to $50,000 selected price as extremely important or important, vs. 85 percent in the $50,000-to-$100,000 income bracket, and 82 percent in the $100,000-plus bracket. Seventy-nine percent of young adults age 18 to 34, 86 percent of 35- to 44-year-olds, 88 percent of 45- to 54-year-olds, 89 percent of 55- to 64-year-olds and 86 percent of those 65 and older said price was extremely important or important.
"Shoppers are now savvier when spending money," said John Deputato, NPD's senior vice president of advanced analytics. "They have new ways of gauging the marketplace; they can compare prices on the Web while at home or while standing in a brick-and-mortar store with their smartphones. We certainly have moved to a time of calculated consumption for shoppers, and price has come to the forefront of the purchase decision."
Deputato said the sophistication of consumers when it comes to price, changes in shopping habits and the soft U.S. economy have made the decision to set retail prices not only more difficult, but also more strategically critical for both retailers and manufacturers.
"Manufacturers and retailers recognize that setting the right pricing strategy is a competitive advantage in the marketplace, but pricing is more difficult today than it was prior to the recession," Deputato said. "We've been working with the top retailers and manufacturers conducting price elasticity research to understand the wide range of potential impact on profits depending on the possible pricing decisions. Prices can't arbitrarily be set, it takes information and a thorough thought process to come up with the right price."
NPD's Economy Tracker is based on online surveys completed by 1,500 members of its online consumer panel each month.