New research has revealed that targeted discounting (otherwise known as personalised pricing) that offers regular discounts on a proportion of products that a shopper regularly buys, can have a substantial effect on where people focus their supermarket shopping.
The findings from Go Inspire Group reveal that around one-in-four shoppers say that they would seriously consider moving the main volume of their supermarket shopping to a competitor brand if they were offered targeted discounting.
Around one-in-ten said they would seriously consider moving their main volume of shopping, even if the competitor brand did not have a store near them and they would have to do this shopping online.
Crawford Davidson, MD of Go Inspire Limited, said: “Smart retail marketers are re-appraising the return on investment from targeted discounts (whether for customer acquisition, retention or development). Unlike blanket discounts or period offers, targeted discounting is tailored to the individual and offers personalised discounts on products the customer already buys. They allow the supermarket to delight the customer for one of their regular purchases – a sort of ‘thank you for being a customer’ – before trying to get them interested in additional products.
“The great advantage of this kind of personalised pricing is that is completely invisible to the competition, does not waste discounts on people who are unlikely to be incentivised, and allows the supermarket to closely measure return on investment.
“The big money is to be made by appealing to the one in four who might be persuaded to move the larger part of the grocery spend to a rival store. Yet we find the one in ten who might move to an online-only alternative in their area to be particularly interesting – indicative of the growing minority for whom physical location is irrelevant. It will be a minority for years to come, but ever so gradually the balance is shifting, and it is the retail marketers who are keeping a really close eye on (and understanding) these shifting behaviours that will come out on top.”