Understanding the factors influencing consumer purchase decisions has always been crucial to profitability, with many organisations spending significant capital to identify customer needs and stay ahead of the competition. Traditionally, the customer decision-making process has revolved around pricing. Even as recently as 2012, the price was the most important influencing factor, with 85% of consumers insisting that prices needed to be reasonable before deciding where to shop. However, over the last ten years, we have seen rapid technological advancements, and product and service attributes have changed, sparking a shift in the consumer purchase decision process with the new factors coming to the fore.
A global survey conducted in 2019 found that product reviews have become an essential factor when making an online purchase, narrowly beating out features and pricing. Many businesses have begun to prioritise improving the customer experience (CX). In 2020, as part of their COVID-19: the CX Impact report, Sitel Group polled U.S. and U.K. consumers and found that 73% of respondents said it would take just one negative experience for them to cut ties with a brand. A year later, one in three consumers revealed that during the first three months of 2021, they had contemplated ending their customer relationship due to a poor customer experience.
While these are undoubtedly key factors influencing consumer purchase decisions, price remains among the most significant. A recent survey revealed that price remained the most important factor when choosing what to buy for around two-thirds of U.K. consumers. Out of over 12 thousand respondents, only a combined 13% disagreed that the price was the most crucial factor for them.
Similar trends can be seen across the pond. With inflation at a record high, many people are beginning to watch their spending and look for value in their purchases. This has sparked a “loyalty shake-up” among American consumers, with many of them ditching brands they had been loyal to for years. The main reason? Price is at the top of the list of consumers’ motivations for switching. Almost all consumers—90%—have noticed that prices are rising.
As of June 23rd, 2022, inflation in the U.K. stands at 9.1% — the worst it has been in 40 years. Our transatlantic partners are not faring much better, with a rate of 8.54%. These figures have significant implications for businesses of all sizes, with many business owners facing the question: What do we do about our prices?
Inflation product pricing is a tricky, nuanced process — how do you keep pace with inflation without alienating customers? Many astute business owners are opting for price management solutions to address these challenges. Adopting Price Intelligence will give retailers a competitive advantage by providing crucial insights to sales, accounting, purchasing, and marketing teams
Our Price Intelligence software is explicitly designed to help retailers save time and increase profits. The Insitetrack price management system has a variety of beneficial reports and tools that help businesses get the most out of their price intelligence journey, giving them a competitive advantage in their respective markets while also giving their customers a fair deal.
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To help us provide the best price intelligence service we recommend a free introductory meeting. This helps us create a price intelligence strategy tailored to your business needs and objectives.
