The clothing sector showed a slight underestimation of prices.
16 Apr. 2012
INTERNATIONAL RESEARCH REVEALS PRICE PERCEPTIONStrategy Consultancy OC&C has published the fifth annual edition of its price perception study, which investigates the international awareness on pricing in the DIY retail, footwear retail, grocery, apparel, consumer household electronics retail, health & beauty retail industries in France, Germany, UK, the Netherlands, USA and, as of this year, China.
Store checks at 270 retailers and 130,000 customer ratings made up the findings that reveal changes in buyer behaviour, strengths and weaknesses of different retail formats and the pricing strategies of leading retailers. Some of the key findings were as follows:
- The majority of customers is able to estimate prices accurately and to identify its position in relation to the competitors’ price levels. Women scored 3.7 more percentage points for accuracy in estimating price levels. Overestimation of prices was the highest in the footwear industry with a slight underestimation in the clothing sector. The USA showed the highest gap between real and estimated prices and Germany the lowest.
- Consumer’s sensitivity regarding price elevations varies from country to country.
- Successful retailers follow mid-term pricing strategies. Weak formats often use price cuts to temporarily stabilize their market position. Often with very challenging mid term effects.
- Expectations regarding price increases and cuts vary from industry to industry.
- Customer perception and attention to detail work to decipher the retailer’s strengths regarding price level and trust, home branding and initiatives.
- Customer-orientation, investing in the gratuitous promise and behavioural and mid-term pricing strategies are the keys to success.
- Online retail is becoming step by step a little less dependent on lower prices. The researched countries expect an increase in online consumer spending of 4.6 percentage points during the next three years. While China currently ranks first with online consumer spendings and the Netherlands last, the expected price advantage when switching to online shopping is the highest in the USA, followed by France. In general, customers estimate online prices to be 7.8% cheaper than in-store.
The full study can be ordered free of charge directly from OC&C’s Sonja Fienert: email@example.com
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