“Good value” trumps “low price” as key factor driving consumers’ purchasing behaviour

Value conscious shoppers favour “sales”, coupons and larger value packs Opportunities abound for retailers to differentiate with more flexible formats such as online shopping with home delivery

SINGAPORE – Nielsen, a leading global provider of insights and analytics into what consumers watch and buy, released a new report that shows consumers across the Asia Pacific region want good value for money more than just low prices when it comes to shopping. In its 2011 Global Shopping and Saving Strategies Survey of more than 6,500 Internet respondents in 13 Asia Pacific countries, 59 percent rated “good value” over “low price” (56%) as the key factor influencing what and where they buy from.

“At the end of the second quarter of 2011, Nielsen recorded a 14 percent increase in sales value for consumer goods products compared to the previous year, with 50 percent of this growth coming from price increases. Consumers, who are faced with almost uniform pricing across all consumer goods retailers, are trying to maximize their shopping experience by finding non-price factors that will give them added value to the money they have to spend,”

said Peter Gale, Managing Director of Retailer Services at Nielsen APMEA.

Nielsen’s analysis shows that price increase is increasingly driving the growth in sales value since the third quarter of last year. This has forced consumers to be more cautious in their spending and to be smarter in selecting where to shop. During this tough time, non-price factors such as good value, convenient location (57%), stock availability (50%) and variability (48%) are regarded by consumers in Asia Pacific as desirable factors as they decide on where to shop.

Low prices, though still influential, are no longer regarded as the most important for the majority of consumers in Asia Pacific countries, with only consumers in Indonesia (69%) and Malaysia (63%) considering this factor as the most influential reason when choosing a store. Countries like Australia and New Zealand consider stock availability as important with 60% and 55% consumers, respectively, claiming this factor as the most influential reason. Saving Strategies: Sales Sail, Usage of Coupons Increases “The uncertain economic outlook this year has prompted nearly all consumers to take actions to save their household expenses. Even though non-price attributes are becoming more important, great sales and promotions play a very influential role in driving shoppers to make a trip to a particular store, especially during this time when rising prices are casting a shadow over household budgets,” said Gale.

Consumers in eleven of thirteen Asia Pacific countries have elected to buy items on sale as their preferred strategy when it comes to saving on household expenses. In particular, Malaysian consumers are the most prolific sale-seekers, followed by New Zealanders, Vietnamese, Australians and Singaporeans.

The use of coupons is increasingly popular among Asia Pacific consumers, with 55 percent of consumers opting for this saving alternative, an increase of nine percentage points from 2010. Coupons are popular with consumers in China, with two-thirds of Chinese consumers choosing to use coupons. Across the region, more consumers are also purchasing larger value packs (increasing eight percentage points to 44 percent this year), with Indian consumers the strongest proponent (46%).

Besides price and value, shoppers want flexible formats Consumers in Asia Pacific are more likely to try new flexible and convenient shopping formats to enhance their shopping experience, compared to other regions of the world. These formats are: online shopping (with four variations) and using handheld scanners in-store to avoid checkout lines.

More than three-quarters of (77%) consumers in the region indicated they would take advantage of the online shopping/home delivery format, compared to one-fifth of North Americans and

one-third of Europeans. This format is especially popular with consumers in nine Asia Pacific countries including China (88%), Vietnam (81%) and Taiwan (71%).

Sixty percent of Asia Pacific consumers said they would like to use hand-held scanners to avoid queuing at check-out lines, making it the second most-favored option for convenient shopping among the five presented. In particular, consumers in Australia (48%), New Zealand (54%) and Singapore (58%) were most inclined to use these scanners. “Asia Pacific consumers are already the some of the most prolific online shoppers in the world, particularly the Koreans. The growing number of digitally-connected consumers in the region certainly provides fertile ground for online formats. Both online formats and the use of hand-held scanners are opportunities for retailers to differentiate their shopping propositions beyond price and promotions,” said Gale.