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Shoppers fixated with discounts pose major worry for shops

NEW YORK – Shoppers who got addicted to the revenue during the last recession are more ways than ever to cross-check prices and bargains, creating a race to the bottom, especially on clothing.

While retailers try to offer more exclusive products and improve the experience shoppers have in the shops, the online market leader Amazon is spreading quickly in the clothing, the creation of more discounting wars. Off-price stores and discount chains to keep the pressure on.

“There is not much that I would have to pay for,” said Sara Scoggins, a 30-year-old Los Angeles resident who uses apps such as Hafta Have for the scanning of articles and the tracking of offers and Honey for coupons and promo codes. “There is always a deal. You’re a sucker not to make a deal.”

The bargain hunting began in earnest during the Great Recession, when stores carry shoppers with discounts on discounts to get rid of mounds of goods, after the consumer spending respectively. But even if the economy stood on, Americans would not let go of the search for offers.

“We have air conditioning consumers especially coming out of the recession for promotions and discounts,” said Jack Kleinhenz, chief economist at the National Retail Federation trade group.

Shoppers have the time and the technology on their side. A growing number of apps, websites, and browser extensions will search for the sending of offers, sales and coupons. And for some shoppers, there is a thrill in outwitting the shops.

Marc Phillips, 26, who works in digital strategies and living in Manhattan, says he usually buys clothes at the end of the season and the stores, from outlets like Nordstrom Rack.

“I have a number of fun offers, such as fun designer names,” he said. “I consider myself to be brand-savvy and price-savvy. I understand the kinds of tricks that shops play.”

The cycle feeds itself. People are accustomed to getting great deals, retailers tried to raise prices saw sales suffer, and the shoppers even more bargains. In addition, if shoppers are attracted in the direction of services and experiences, ask for things like clothing has decreased — meaning shops have an even harder time raising prices.

Department store, mall based clothing retailers have grappled with the biggest challenges. Even luxury names such as Michael Kors and Ralph Lauren have struggled to shoppers to buy without discounts. And experts expect the update to rise if Amazon is getting more aggressive in the sale of clothing.

Amazon has a big pressure on the expansion of its offerings under private labels such as Lark & Ro designed to be both stylish and recognizable national brands. So shoppers looking for a skirt or pants are automatically shown that brand compared to a well-known label.

A Lark & Ro skirt would be 50 percent below a similar article from a national brand, says Michelle Ai, manager marketing at Boomerang Commerce, a startup that helps retailers use data to make price adjustments.

Amazon is ready to outdo Macy’s this year as the largest U.S. clothing seller, according to Cowen & Co. analysts. They predict that Amazon’s share of the U.S. apparel market increased from 6.6 percent last year to 16.2 percent in 2021 as it gets more Prime-members, and raises the clothing of your choice.

And in the meantime, U.S. retailers are facing new competition from low-price of the international rivals, including the Primark chain, which has begun with the opening of stores in the Eastern U.S., It offers a jeans as low as $7 and tops for $4.

All of this means that retailers actually have less ability to raise prices now than during the recession, says Michael P. Niemira, chief economist at The Retail Economist, LLC, based on an analysis of the data provided.

List, an online fashion platform, said that 30 percent of the orders on the site last year included with a discount, an increase of 23 per cent in 2014.

And the First impression, which helps retailers to price new items, says the tests have found approximately 8 percent of the products over the last three quarters, could sell for full price or higher. That is less than the 11 percent average over the last few years.

Even that drop “has a significant impact on the industry,” says Greg Petro, president and CEO of First Insight.

So is there anything shops can do to convince people that their stuff is worth full price?

Kleinhenz says stores need to differentiate their products to give people an extra incentive to buy it without the sale. J. C. Penney, which called his previous level of discounts “unhealthy” is planning a data-driven approach of the rates to a better management of the discounting. Historically, Penney decisions on pricing and promotions all instinctively and with a couple of analytics.

Ai, meanwhile, thinks retailers such as Macy’s needed to test a lower range of the prices online with its store-label products, which could drive more shoppers to their site.

In the end, it is a shopper’s choice whether or not you want to wait or jump.

Leor Reef 24, who works in public relations and is based in Chicago, says that he learned about the economy of his parents, who are always good deals. He especially online stores, used, browser extensions, price trackers, such as camelcamel.com and has the tendency to buy only when he sees that a good deal.

“It makes me more in control as a consumer,” he said. “As long as I’m not in a rush, I can hunt around and use my tools to find the best price.”

The downside? Reef wanted to the popular Wilson Evolution basketball and waited a month for the price to go down, and with 15 percent, but then it was sold out and he stood with empty hands.

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