New Study: Baby Boomers Expect Deeper Discounts Than Millennials and Gen-Xers #ShopTalk
Consumers No Longer Willing to Pay Full Price as Deep Discounts From Department Stores Influence Consumer Behavior
Results of the survey, which queried 750 participants in the United States on their shopping habits, purchase behavior, discount expectations, and influences driving purchase decisions, were announced today during Shoptalk in Las Vegas.
“The results of this survey indicate that the rampant discounting that has become the norm in department stores and mass merchants has had a clear impact on consumers and the way they now consider purchases in every aspect of their lives,” said Greg Petro, CEO and Founder of First Insight. “In categories ranging from home electronics to automobiles, a vast majority of Baby Boomers and Gen-Xers are less likely to consider purchasing at full price, with Millennials less impacted by discounts overall. This is an incredibly useful finding, and retailers need to be aware of these shifting expectations within their target audiences in order to compete, while still maximizing profits and sales. It’s a delicate balance.”
Download the infographic that illustrates the key findings of the survey here.
Significant findings of the survey include:
Today’s Consumers Expect Discounts Every Time They Shop
Ninety percent of all consumers surveyed acknowledged that discounts in department stores and mass merchants significantly influenced, or somewhat influenced, their expectations for discounts in home electronics. Similar expectations were shared by consumers shopping for home appliances (88%), furniture (86%), smartphones (83%) and vehicles (80%).
Baby Boomers Are Least Likely to Pay Full Price; Discounts Have Less Impact on Millennials
According to the findings, the vast majority of Baby Boomers surveyed expect some level of discount in order to consider a purchase. Across every category including vehicles, smartphones, furniture, and home appliances, more than 70 percent of Baby Boomers said they would ‘definitely not’ or ‘probably not’ purchase an item in these categories at full price, with an even higher 79 percent stating a discount would likely be necessary when purchasing home electronics.
Millennials, however, indicated that discounting may have a reduced effect on purchase decisions. Significantly less than half of Millennials stated they would ‘definitely not’ or ‘probably not’ buy vehicles (39%), furniture (40%), home appliances (42%) and home electronics (41%) at full price. Only 35 percent would be less likely to buy a smartphone at full price. Millennials continue to be avid shoppers, however, with 66 percent of Millennials surveyed planning on buying a smartphone and 65 percent planning on buying home electronics in the next twelve months.
Gender Doesn’t Impact Expectations for Discounts
Somewhat surprisingly, across every category, men and women largely shared the same or similar response in terms of how discounts from department stores and mass merchants are impacting expectations for discounts in other categories. For example, eighty-nine percent of women stated discounts have had an impact on their purchase decision in furniture, versus eighty-four percent of men — the widest gap. Women showed only a slightly higher impact (one to three percentage points) in all other categories but smartphones, where 83 percent of both men and women felt there was an impact.
Deepest Discounts Expected in Electronics, Home Appliances and Furniture
Roughly 80 percent of all respondents reported they would ‘definitely’ or ‘probably’ buy a product that met their needs at the deepest discounts suggested by the study in categories of home electronics, home appliances and furniture. However, deep discounts showed a significantly lower impact on purchase decisions surrounding smartphones and vehicles with only 66 percent and 55 percent of respondents saying they’d definitely or probably buy these products if deeply discounted, respectively.
Discount rates were selected based on discounts commonly observed within each category, with deep discounts in home electronics, home appliances and furniture at 40 percent, smartphones at 20 percent and vehicles at 15 percent.
Notes on Survey Methodology and Analysis
First Insight’s findings are based on a targeted sample of 750 respondents from three distinct demographics: Baby Boomers, Gen X-ers and Millennials in the United States. The survey was fielded in March 2017 and was completed through proprietary sample sources amongst panelists who participate in online surveys.
About First Insight, Inc.
First Insight is the world’s leading provider of solutions that empower retailers and brands to incorporate the voice of the consumer into the design and merchandising of new products. Through the use of online consumer engagement, the First Insight solution gathers real-time consumer data and applies predictive analytic models to create actionable insights, which drive measurable value. Retailers, manufacturers and brands use the First Insight solution to design, select, price and market the most profitable new products for reduced markdown rates and improved sales, margins and inventory turnover. Customers include some of the world’s leading vertically integrated brands, sporting goods companies, department stores, mass merchant retailers and wholesalers. For further information, please visit www.firstinsight.com.
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