Recent research by Kantar WorldPanel is suggesting that consumer buying habits have changed.
It seems that seasonal buying has changed and that consumer are happy to hold off before making their essential purchases. This delay has been down to consumers picking their moment to get the best price.
This makes sense to me. Back in the day I recall my mother marching me off to the local shoe shop at the end of summer for new school shoes. The only choice available was whatever was about a dozen shops on the high street.
Today, however, competition has bloomed. Type in “School Shoes” into Google and there are 33 million websites – that’s a very long high street.
With this extra competition, comes choice and different pricing strategies.
Just to add extra weight to this argument, I vividly recall the Chairman of the John Lewis Group being interviewed on radio 4. He noted that Christmas now commences on Black Friday and consumer spending for price sensitive customers revolves round these promotion events.
This means customers will hold off buying until they are happy, this will include buying Easter gifts after Easter for 2018!
What does this means for retailers? Businesses stuck in a rigid, seasonal buying cycle may find themselves with additional stock they need to discount more often than they like.
Discount or not to discount that is the question
So, as the shift moves away from seasonal buying and competition increases, retailers have a difficult question to answer – Do I hold my price and risk not shifting stock or drop my price and lose profit?
In the clothing market a report concluded approximately “90% of the trading weeks in 2016, more than half the had some sort of sale going on”.
With this level of frequency is hardly surprising that customers pick their moment.
Let us know your thoughts.