First Insight: Retailers Driving Markdown Mania

According to a study from First Insights, a pricing technology solutions firm, bargain hunting is having a big effect on retail prospects today, with 45% of women who responded to a survey stating that they must see a markdown of 41% or greater to even enter a store today.

The company also noted that 39% of consumers are willing to travel from one store to another to see if they can buy an item at a lower price.

In a previous study, First Insight found that the majority of women are no longer interested in paying full price for items. In announcing its latest research into the issue, First Insights pointed out that consumers expect to find worthwhile markdowns at retailers such as Walmart and Target, as 34% of survey respondents thought they could find the best value at big box stores, followed by department stores and off-price retailers, such as Macy’s and T.J. Maxx, at 26% each. Still, when weighing online and in-store shopping, 60% of consumers surveyed declared that they see the biggest product markdowns online.

Consumers are less likely to turn to luxury and boutique brands for value, First Insights indicated. Only 6% of consumers surveyed responded that they found the greatest value at luxury retailers and just 3% saying that they were turning to boutique retailers for value.

As for products, 45% of survey respondents reported that they only buy brand name items when they’re on sale.

“This new markdowns-focused shopping mindset is hurting the entire retail industry as deep discounts have completely shifted the way consumers view an item’s worth,” said Greg Petro, First Insight CEO. “Retailers need to stop relying on markdowns to solve their problems, and instead re-examine their pricing strategies and invest in technologies like predictive analytics to learn more about what their customers value most.”