Quite some time ago, colleague Jim Hopes sent me a story that he had read in the RBR/TVBR newsletter. The story (from last March) suggested that consumers were switching away from time savings—and toward cost savings—in response to the effects of the Great Recession. The opinion was based on research by AlixPartners LLP.
As if to raise the counter-point, I came across this story from Media Post Marketing Daily, which suggested that price is not the only thing that matters to shoppers. Quoting Todd Hale, Nielsen's SVP/Consumer & Shopper Insights, the story asserted that, “…consumers are getting tired of all the work it takes to save money, so stores need to remember that shoppers value other things, too, whether it's convenience, variety and assortment, or a focus on health and wellness."
Implications: I didn’t pass the RBR story along immediately after receiving it, because I wasn’t convinced that “price is now the only thing” that matters to consumers. I don’t think all consumers choose price above all else. I think that when financial conditions require it, many consumers are attracted by price. And I believe that in the absence of any other unique selling proposition, price becomes the default influence over most purchase decisions.
I was conducting an Elm Street Economics workshop in Houston last week, which had about fifty business owners, managers, and marketers in the room. I asked the room to indicate, by show of hands, who among us was expected to do less in their jobs today than they were expected to do three or four years ago. Not one hand went up.
Now, that’s far from a scientific survey, but the point is that a lot of people are working harder—and over more hours per week—than they ever have before. None of those folks have decided that price is more important than convenience. Perhaps, for a time, many have been forced to give price extra consideration. But don’t expect convenience to lie down for long, in a world where people are so time-stressed.
More important than price… is value. People often use the two words as if they are interchangeable, and they are not. Price is what the consumer puts into a product. Value is what they take out of it.
[My thanks to Jim Hopes for sparking this important topic. Jim is the CEO at The Center for Sales Strategy, Inc.]