Does convenience trump price for today’s consumer?

Discussion
Photo: Walmart
Jan 21, 2020
Al McClain

During last week’s annual convention, the National Retail Federation (NRF) released a report showing that 83 percent of consumers say convenience while shopping is more important to them than it was five years ago. The report further states that 97 percent of respondents have backed out of a purchase because of some inconvenience.  Ninety-three percent are more likely to shop at a certain retailer based on convenience.

Still, the most important factors to respondents are quality (32 percent) followed closely by the lowest price (30 percent). Convenience is mentioned as most important by just 13 percent, with a brand’s values mentioned by 12 percent and overall brand mentioned by 11 percent.

Two-thirds of consumers are willing to pay more for convenience in the grocery category; 61 percent will pay more in clothing, 59 percent in electronics, and 58 percent in personal care and pet supplies.

NRF says strategies like buy online, pickup in-store (BOPIS) ensure that shoppers have convenient experiences regardless of channel. Indeed, 70 percent of those surveyed said BOPIS improved their shopping experience. Nearly 80 percent have picked up items at in-store registers; over 40 percent have used curbside pickup; 32 percent have tried trunk delivery and 28 percent have used pickup lockers.

For online shopping, convenience matters most during the beginning research portion of the journey, whereas for brick and mortar, convenience matters most at checkout.

Consumer suggestions as to how stores could make the shopping experience still more convenient included asking retailers to place BOPIS items in a pickup area near the front of the store, offering online tools to locate items in stores and providing more staff assistance in locating sizes and trying on items.

DISCUSSION QUESTIONS: What specific changes should retailers implement to make the shopping experience more convenient for online, mobile and brick and mortar shoppers? How can retailers best balance the price/convenience mix?

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Braintrust
"We're living in an 'all of the above' world, where retailers must offer a portfolio of convenient choices."
"Start fixing the basics. Start with BOPIS."
"Convenience has become a staple part of a shoppers expectations these days, but new innovative ideas can provide a competitive edge for retailers."

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27 Comments on "Does convenience trump price for today’s consumer?"


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Mark Ryski
BrainTrust

When it comes to price vs. convenience, consumers want their cake and to eat it too. There will always be some tension between trying to satisfy these two somewhat disparate goals. Of the many areas that relate to convenience, I’d say BOPIS is one of the most important services for shoppers today. Buying online and having the convenience of picking up in store, is fast becoming a fundamental expectation for shoppers. And it’s not good enough just having a BOPIS offering, it had better work well – a bad BOPIS experience can seriously impact consumer confidence and cause shoppers to go elsewhere.

Bob Phibbs
BrainTrust

We are entering the age of one basket that follows the consumer. Smart retailers are working to be channel agnostic – no one wants to check out on an app, a website, in-store, on social – all separately. It all needs to be one basket. When we get rid of channels and look at what is called unified commerce, we will see true convenience. Until that happens, it is a lot of gobbledygook talking about valuing the customer.

Carol Spieckerman
BrainTrust

Convenience trumps price much more often than retailers (used to) realize. Now retailers get it that they can’t afford to force shoppers into a couple of convenience options that are easier or more profitable to execute. Different shoppers define convenience differently and a single shopper can look at it differently depending on the category being shopped, the occasion or even time of day. We’re living in an “all of the above” world, where retailers must offer a portfolio of convenient choices. Choice and convenience are synonymous for shoppers. The good news is, retailers that kill with convenience can sell more at full price. It’s just that important.

Dr. Stephen Needel
BrainTrust

What strikes me is how many different ways we might think about convenience and how those definitions change as we move through a purchase process. For example, convenience in online searching is different from convenience in BOPIS. The simple answer is that retailers need to reduce friction points in finding and buying a product wherever they can. In many cases, this is a no-cost or low-cost process – the fixes are often that simple (add one more clerk at the self-checkout, move BOPIS to the front of the store, separate parking area for BOPIS, etc.) My experience has been that they need outsiders to tell them where the friction points are – where are your mothers when you need them most?

Jeff Weidauer
BrainTrust

Consumers want it all – that’s not new. But they have a larger set of options than ever. For retailers, the challenge continues to grow. What one shopper finds convenient might be just the opposite for another; how they want it today might not be how they want it tomorrow. There is no single right answer. The solution is options for consumers — options that allow them to define what convenience means to them, today.

Kathleen Fischer
BrainTrust

Today’s time-starved consumers require the ability to quickly and easily get what they want – they have been trained that way! For retailers, the ability to offer their customers a seamless shopping experience across all channels is imperative. Retailers should be looking at ways to bring in additional technology to help with the shopping process. In enVista’s Consumer Study we found that 38 percent of consumers would be more likely to shop a store offering an automated pick-up process and 47 percent would like to see an automated returns process. These technologies are examples of ways to help make the pick up and return process quicker, easier and more convenient.

Richard Hernandez
BrainTrust

I am in the same camp as most responses here are – you really have to have both these days. It is too easy to find options where you do have both and it is expected from today’s customers.

Ralph Jacobson
BrainTrust

With ubiquitous information available across all shopping channels, I still see price being the primary driver, over quality and convenience. Sure those other criteria are important, but price is the most prevalent comparison filter utilized first by shoppers. Those retailers that do not compete on price primarily must create awareness of their compelling reasons to buy their stuff in the same channels, outlets and on the same websites that shoppers where looking for the best price. It’s not easy, but it can be made simpler with tools available today.

Brandon Rael
BrainTrust

The friction/reward principle is alive and well in today’s retail world. Consumers are seeking a convenient and relatively frictionless way to shop, all while balancing quality and at the right price points. However, it’s clear that consumers will forgo some of their standards around quality and pricing in order to get their products quickly and with minimal friction.

Amazon may be the default option with their Prime shipping, yet we are now seeing Target, Home Depot, Best Buy, Nordstrom, Macy’s, Kohl’s and many other retailers step up to the plate and offer BOPIS, curbside pickup, locker options, ship-from-store fulfillment etc., in order to bridge the gap and offer consumers more choices. There will continue to be a balance between friction and reward as the lines between the digital and physical stores merge, and this is what retailers will have to carefully manage.

Bob Amster
BrainTrust

These values have changed over time. Convenience and quality appear to be as or more important than price. Retailers need to ensure that websites are easy to navigate and transactions easy to consummate. Retailers also need to ensure that their inventory systems accurately reflect what is available for pick-up in-store. Retailers need to improve the training of associates and apply methods for making these associates advocates for the business and the products it sells. Much of shopping is a necessity and, therefore, it has to be convenient to access, easy to find products, pay and leave. When shopping is a leisurely activity the needs can change, but that is the exception, not the rule.

Suresh Chaganti
BrainTrust
Suresh Chaganti
Co-Founder and Executive Partner, VectorScient
4 months 8 days ago

BOPIS will be table stakes soon, if it isn’t already. Anything that isn’t tangible savings becomes an implicit expectation, and the customer is unwilling to pay more. Unfortunately, price will continue to be the differentiator.

Richard J. George, Ph.D.
BrainTrust

Convenience is the new ante. Consumer time is the only fixed resource @ 168 hours per week. Price has always been the retailer’s mantra and we have conditioned customers to expect, no demand, low prices. This is not the time to be cavalier about price but it is time to understand the real role of convenience.

Lots of good suggestions to enhance convenience in the article and by panelists. My addition is to borrow/steal from the king of shopping convenience, namely Amazon.

Zach Zalowitz
BrainTrust

The specific changes are as follows: 1.) one-Click ordering, 2.) saved “omnichannel” payment tokens, 3.) saved preferences/suggested buying based on prior order history, 4.) More accurate and helpful previous ratings and, finally, 5) omni-cart technology to take your checkout cart started in one channel and finish the order process in another.

All the above should be in play for most retailers, but often none are done. The key to unlocking a convenient and therefore fast process is to remove the friction with these five things above.

Liz Crawford
BrainTrust

Sure, in these go-go days of the bull market, convenience trumps price. When the market drops, the equation will shift.

Jeff Sward
BrainTrust

Let’s face it, everything is more convenient than it was five years ago. So of course the bar is raised. But saying convenience will outweigh price or preference is another thing. Five minutes on a mobile phone will satisfy most shoppers’ first choice in a combination of price and convenience that works. Settling for a second choice product because of convenience feels very last year to me.

Oliver Guy
BrainTrust

This really depends on the consumer in question. A family where both parents work long hours can be considered a “cash rich, time poor” household in comparison to one where one of the parents stays at home or indeed a retired couple.

Consumers with more time on their hands will naturally be less time-sensitive – possibly splitting shopping between multiple stores in order to get the best deal. What would be fascinating would be to understand the breakdown of the preference percentages by demographic and household make-up.

This makes meeting the shopping experience expectations of these different groups very challenging. My perspective would be that when investing in specific initiatives (in-store pick-up, delivery etc.) that are designed to aid convenience of shoppers, retailers may well need to consider the overall size (and wallet size) of the target group for the initiative.

Herb Sorensen
BrainTrust

I don’t think things have changed that much since 1981: “Price it right!“. The “fast thinking” of the subconscious mind still rules shopping, as explored in “Thinking, Fast and Slow” Daniel Kahneman.

Think about this:

“What we obtain too cheap,
We esteem too lightly;
‘tis dearness only that gives everything its value.”
–Thomas Paine, The American Crisis, No. 1 (December 23, 1776)

Andrew Blatherwick
BrainTrust
It is human nature to say that price is one of the most important factors when shopping. It is also true that price is one of the major factors determining where people shop. However, as stated in the research, most people have pulled out of a transaction if it is inconvenient or time consuming, people want to be able to shop in a pleasant and efficient environment. From the research, it suggests that consumers are willing to pay more for convenience, the sharp rise in BOPIS has proved this as has the increase in store of things like self-checkout. Convenience has become a staple part of a shoppers expectations these days, but new innovative ideas can provide a competitive edge for retailers. However, there are some ideas that run counter to a retailer’s DNA. The desire for customers to have BOPIS collection points at the front of the store, meaning that they do not walk through the store with the opportunity to buy more is not something retailers will want to rush into. The beauty… Read more »
Ananda Chakravarty
BrainTrust

Both price and convenience matter to the customer and the importance depends in part on the customer’s circumstances. It’s very dynamic, fluid, and individual. When looking for paper towels on the road for a picnic, it will come down to convenience. When it’s buying in bulk for the year, it’s price. While selecting new jewelry for an anniversary, it’s price (and quality). But having it delivered because they forgot to order it in time is all convenience. The retailer needs to address the customer’s context, any attempts at generalizing which is more important doesn’t make much sense. What retailers must do is find ways to address as broad a scope as possible per their own business strategy. For a c-store for example, it’s about offering convenience in the store. For an electronics gaming shop it’s price online. The mix is fluid per the retailer’s own strategy.

Michael La Kier
BrainTrust

It’s hard to beat the convenience of Amazon. Shoppers don’t always believe they have the best prices, but they likely have whatever you are looking for and can get it to you fast. Helping shoppers find what they want fast will be the key to future shopping. Retailers must invest in technology to make shopping faster…and better.

Dave Nixon
BrainTrust

Start fixing the basics. Start with BOPIS.

If customers want convenience, then segregate online shoppers from the physical shopper. It’s time to allow for new thinking around BOPIS where the online experience collides with the physical experience (and not in a good way).

Separate the two models: not the same parking lot for pickup and parking, not the same inventory where shoppers are competing with pickers for the same product and not the same product inventory across both models.

Consolidate the WAY you make the purchase but design the best delivery methods (Online, In-Store and BOPIS) to control the CX for each specific delivery mechanism.

Gene Detroyer
BrainTrust

For me, time is my most precious commodity. That is both a measure of earning, but more important, the things that are priceless, like spending time with my wife, friends, family and especially my grandchildren.

So either consciously or sub-consciously I am measuring price versus convenience. In a different way, “how more am I willing to spend to save the time of shopping?”

The answer is almost always the same. Convenience wins over price. And, I will go one step more … I will go to one place online that surely has what I am looking for and go no farther.

Lee Peterson
BrainTrust

Warren Buffet says, “price is what you pay, value is what you get,” and that’s what we’re hearing from consumers: value (not price) is #1. Not far behind though in recent studies is convenience, and, obviously, they CAN and are connected by the top e-com players.

To me, both need an explanation though as, thanks to companies like McDonald’s, Americans tend to confuse value with price, but they are much different. The above statement is a great way to help explain that to consumers to get an accurate read on the difference.

Gene Detroyer
BrainTrust

Absolutely, convenience has a value. More and more shoppers are interpreting that value into dollars and cents.

Shep Hyken
BrainTrust

Convenience is the next level of customer service and experience. Yes, customers are willing to pay more for convenience. Our research proves that customers value convenience even more than customer service. Save your customers time and effort and customers will come back. All things being equal, the retailer that is easier to do business with wins.

Consider a convenience store. It even has the word “convenience” in its name. Selection is less than a traditional grocery store, yet the price is a little higher. Why? People are willing to pay for convenience. Or the mini-bar in the hotel room where, typically, prices in the mini-bar can be substantially higher.

Now, just because customers are willing to pay more for convenience, doesn’t mean you have to always charge more. Yet, recognizing customers might pay will make price less relevant. A competitive price, not necessarily the lowest price, is often what is needed to win the customer’s business, and sometimes their loyalty.

Craig Sundstrom
Guest

My initial reaction to this study is that it’s a perfect example of the “say one thing, do another” phenomenon that plagues surveys (83% … really?). But let’s assume, for the sake of argument, that convenience is important (even if maybe not dramatically more so than in the past). So what does a retailer do? They listen to their customers, of course … but they don’t place the needs of one group over the other. Increase staffing and accessibility for BOPIS? Fine, but don’t take people off the sales floor, or place the information desk where no one can find it to do so.

Jeffrey McNulty
BrainTrust

Convenience and price have become symbiotic companions in the retail environment which can and will create massive differentiation. Retailers are finally investing in their infrastructure by offering more convenient options to satisfy their guests needs.

BOPIS should be a starting point for all retailers to “keep up with the Joneses.” The next hurdle for many retailers will be to simplify their returns processes to ensure a smooth transition from purchasing to returning throughout all of their channels.

I am optimistic about the plethora of retailers who are adapting and acclimating to the New Retail Ethos.

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Braintrust
"We're living in an 'all of the above' world, where retailers must offer a portfolio of convenient choices."
"Start fixing the basics. Start with BOPIS."
"Convenience has become a staple part of a shoppers expectations these days, but new innovative ideas can provide a competitive edge for retailers."

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