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Targeted Discounting Can Have 'Substantial Effect' On Consumer Spend

Published on Oct 19 2018 1:29 PM in Retail tagged: Supermarkets / Paywall / Targeted Discounting / Go Inspire Group

Targeted Discounting Can Have 'Substantial Effect' On Consumer Spend

New research from Go Inspire Group has revealed that targeted discounting, in the form of personalised pricing, can have a substantial effect on where people focus their supermarket shopping.

The research revealed that approximately 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.

Online Opportunities

One in ten said that 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.

“Smart retail marketers are re-appraising the return on investment from targeted discounts (whether for customer acquisition, retention or development)," said Crawford Davidson, managing director of Go Inspire Limited.

"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.”

Changing Mentality

Davidson highlighted the advantage of personalised pricing, in that it is completely invisible to the competition, which means supermarkets can better measure the 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,” Davidson concluded.

‘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.”

© 2018 European Supermarket Magazine – your source for the latest retail news. Article by Aidan O'Sullivan. Click subscribe to sign up to ESM: European Supermarket Magazine.

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