Dealers, you can run special deals and promotions, fine-tune customer service and create an enjoyable shopping experience, but customers are unlikely to reach for their wallets if the price isn’t right. A recent survey from The NPD Group found that 85 percent of consumers say price plays a crucial role in deciding where they’ll spend their money.
The survey also reported consumer importance of:
• Sales and special deals: 75 percent
• Customer service: 56 percent
• Convenience of store location: 60 percent
• Ease of shopping: 60 percent.
These numbers may not apply exactly to those who shop in gun stores, but they are likely very close. Also, one of the challenges dealers face is consumers have access to vast amounts of instant info.
“Shoppers are now savvier when spending money. They have new ways of gauging the marketplace — they can compare prices on the web while at home or while standing in a brick-and-mortar store with their smartphones,” said John Deputato, NPD senior vice president, advanced analytics. “We certainly have moved to a time of calculated consumption for shoppers … and price has come to the forefront of the purchase decision.”
Age may equal wisdom and wiser spending habits, but even younger customers are concerned with prices, according to the survey. Seventy-nine percent of young adults aged 18 to 34 are concerned about price tags, NPD reports, with the number steadily rising through the age brackets. Almost 90 percent of 55-to-64-year-olds place a heavy emphasis on pricing.
Income also doesn’t lessen a customer’s concern about proper pricing. Customers bringing in $25,000 to $50,000 in annual salary are only slightly more likely to value pricing as extremely important than those making $100,000, at 87 and 82 percent, respectively.
Setting retail prices poses a challenge to dealers for a variety of reasons. You already know what NPD reports: that the Internet has helped consumers become more knowledgeable than they’ve ever been. Toss into the mix evolving shopping habits and a wavering U.S. economy, and setting retail prices becomes tricky for dealers.
“Manufacturers and retailers recognize that setting the right pricing strategy is a competitive advantage in the marketplace, but pricing is more difficult today than it was prior to the recession,” Deputato said. “We’ve been working with the top retailers and manufacturers, conducting price elasticity research to understand the wide range of potential impact on profits, depending on the possible pricing decisions. Prices can’t arbitrarily be set; it takes information and a thorough thought process to come up with the right price.”
Dealers, what strategies do you use to set retail prices? How do you handle this challenge, and the growing power consumers have in Internet-based knowledge? We at SI would like to hear from you. Email me, J.K. Autry, at: email@example.com.
To review The NPD Group report, visit www.npd.com.
By J.K. Autry
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