Consumers around the world continue their broad efforts to save money at the checkout counter, but while low prices are important to shoppers, getting a good value for their money takes priority. Fully 61 percent of global online consumers rated “good value” over “low price” (58%) as the most influential reason to shop at a particular retailer, according to Nielsen’s 2011 Global Online Survey of more than 25,000 Internet respondents across 51 countries.
The study shows that while factors relating to value and price are important drivers of where to shop and what to buy, retailers and manufacturers who offer good values—whether through sales and promotions or via larger-sized economy packaging—stand to gain the most from consumers who continue efforts to stretch their money in a tough economy.
The preference for value over lowest prices in retailer choice was found to be true in Asia Pacific, Europe, Latin America, and North America, while slightly more Middle East/Africa respondents preferred lowest overall prices (59%) to good values (54%). Other attributes rated as “highly influential” by more than half of global online consumers were convenient location, great sales/promotions, well-stocked shelves and high-quality fresh produce.
Bigger is Better & Quality is Key
Commodity and raw material costs continue to rise, squeezing profit opportunities for producers and brands. For CPG manufacturers and retailers seeking direction on consumer demand, the study found a clear preference for strategies that increase value—even in the form of more expensive overall package prices.
When given the choice of either purchasing large value packs at a lower price per serving or smaller pack sizes at a lower cost, global online consumers voted 2:1 for the former. Thirty-six percent of global online respondents indicated they would prefer manufacturers to offer larger economy size packages, with lower prices per usage/serving. Half as many respondents (18%) said they would prefer new, smaller-sized packages at lower prices, and only about one-in-ten (12%) would prefer modestly downsized packages at the existing price level.
Roughly one-third of consumers in every region say they would prefer the larger, economy-sized packages, but the sentiment is most pronounced in North America, where 39 percent of consumers indicated a preference for value packs, 20 percent for smaller packages at lower prices, and 11 percent for modestly downsized packages at current prices. “However, in tough economic times and with wide fluctuations in commodity pricing, downsizing has been a successful strategy taken by manufacturers and retailers,” said Todd Hale, SVP Consumer & Shopper Insights, Nielsen. “To remain profitable, retailers and manufacturers have a few choices: raise prices to cover input increases, modify ingredients to make products cost less to produce or downsize.”
Consumers around the world make it clear that quality is not to be compromised. Producing slightly lower quality products, but keeping prices the same is the least favored option among consumers in all regions. Raising prices is also a strategy that consumers do not embrace.
For more detail and regional insights, download: Shopping & Saving Strategies Around the World.