Will Consumers Ever Pay Full Retail Price Again?


Share on LinkedIn

June sales are leaving many retailers anxious about the approaching back-to-school shopping season. Consumers continue to buy less and they are more discriminating than ever. However; many brand consultants argue that the recession has not created a pricing shift but a higher degree of awareness regarding the value of products and brands. Today’s discount shopper is clearly reluctant to spend on premium brands if the value is missing.

I recently pulled out C. Britt Beemer and Robert L. Shook’s book “It Takes a Prophet to Make a Profit … 15 Trends that are Reshaping American Business.” Published in 2001, trend #6 reads:

“Consumers Are Reluctant to Pay Full Retail Price”

Their research showed the number one reason Americans dislike paying full retail price is that they think prices are too high. Fifty-seven percent of discount shoppers expressed that opinion. In addition, they reported:

• 82 percent said they knew the item would be on sale someday.
• 82 percent also said that somebody always has it on sale.
• 79 percent said they normally wait for sales because they don’t need an item right away.
• 46 percent felt that quality has suffered.
• 34 percent said that service has declined.

It’s difficult to read consumers because they are not always consistent. But when your customers are skittish about spending it’s not hard to see that both quality and value for the dollar are important.

TwitterCounter for @alansee

Add to Technorati Favorites

Alan See
Alan See is Principal and Chief Marketing Officer of CMO Temps, LLC. He is the American Marketing Association Marketer of the Year for Content Marketing and recognized as one of the "Top 50 Most Influential CMO's on Social Media" by Forbes. Alan is an active blogger and frequent presenter on topics that help organizations develop marketing strategies and sales initiatives to power profitable growth. Alan holds BBA and MBA degrees from Abilene Christian University.


  1. Alan, There is no such thing as Full Retail Price! Ever since the fair trade laws/regulations were taken off the books – the excuse used was that it would lower retail prices – the price you see on any product once it has been purchased by a store, it is Suggested Retail Price. As one sales manager told me many years ago when I was complaining about the inflated retail prices of his merchandise, his reply to me was, “Mr. Zell, these are Suggested Retail Prices. If I suggest that you jump off the bridge, does that mean you have to?”

    But, even when fair trade was on, some goods carried a much higher markup because they were seasonal and had to be discounted at the end of the season. But, those were genuine close out sale prices. Filene’s Basement was famous for the way they discounted merchandise that had been in inventory too long.• 82 percent said they knew the item would be on sale someday.

    As to these points:

    • 82 percent also said that somebody always has it on sale.

    Someday? It is not uncommon for merchandise to be on sale the moment it hits the floor. Women, for sure, know that they should wait even longer. Some stores started, and most do now, that if something was purchased and the price was reduced within 30 days of the date of purchase.

    Hotels or agencies handling both hotel and airline reservations will, when they discover the price has been reduced will lower or meet the price if it is called to their attention. But, of course, who knows what the “right price’ really is.

    • 79 percent said they normally wait for sales because they don’t need an item right away.

    Those that NEED them right away are only a small exception to the rule.

    • 46 percent felt that quality has suffered.

    This is not due to their being sold for less than SRP. The quality has suffered because those making the decision of what quality to build in don’t care what the level of quality is because they have little respect for the products carrying the name. I could fill two columns on a legal pad to list these firms While I miss retailing because I was around beautiful merchandise every day I went to work, I’m glad I’m not in it now because it would be difficult to justify that I was responsible for buying it for our store.

    Many very high quality lines have disappeared from market due to allowing the quality to drop or they have stayed in business selling lower quality because the salespeople and the public do not know how to tell when things look the same what the differences in quality are. I blame this on the “MBA Syndrome” (I may be insulting some of the readers of my reply) where people were taught they did not have to know anything about the idiosyncrasies of the things thee business offered to their public, only sales were important. That was not just at retail. It was very evident att the raw material level, in manufacturing too.

    In my retailing days, no matter what the material we carried in our store, my mentors knew how to tell what the level of quality was of the goods they were looking at. That know, they would look at the price to see if it was a good value at the price stated.

    • 34 percent said that service has declined.

    It has nothing to do with goods being discounted other than the attitude of management towards their customers. Lip service they gave to service but their lips never moved. (See the article on my web site about service.)

    Why, tell me, would any persons, supposedly smart, take the least trained and lease knowledgeable salespeople and task them to do the most important function of the business – make sales. It only shows the lack of respect for the customers that come into their stores.

    So, what do stores do when the salespeople, if one can find them, are only, at best, clerks, do? The “buy” the sale by cutting the price. Whey should a customer pay full price when the customer has to do what, for full price, what should have been done for them?

    What has happened since the end of WWII, that as each generation came on, the demand for quality was less and less because during the war, a lot of things were just put aside for the war effort. . . and a lot if it was never to return.

    Can you (not you, Alan, but the “you’s who are reading my reply) look at a watch and tell whether or not it is a better quality than others that a story has to sell? Can you tell whether or not a cashmere sweater or scarf will pill? Do you know what the criteria is for what makes the different in silver, in pottery, in paper? If you can, then you are peopl3 with “10 toes on one foot” i.e. that you could be called exceptional shoppers.

    Yes, there are some stores that do not discount prices and have knowledgeable salespeople. In Portland we have an long established hardware store, Winks, that does. And, for the most part, when I go into my local Ace Hardware store I find full price merchandise being sold at full price. There are butchers, bakers, candlestick makers who come into this arena where they can sell without cutting the price. Interesting, as the price goes up in other stores, the frequency and percentage of the discounts also increase. Hmmmmmmmmmm.

    So, will anyone pay full price? No, until some brave souls have the gumption and backing to bite the bullet and only sell at the full price. I hope you can find them . . . to date, no one has.

    Alan J. Zell, Ambassador Of Selling, Attitudes for Selling
    [email protected]
    Winner of the Murray Award for Marketing Excellence
    Member, PNW Sales & Marketing Group
    Member, Institute of Management Consultants
    Member, International Speakers Network
    Member, US Delegation, 1980 International Olympic Academy
    Member, International Society of Olympic Historians
    Member, Ice Dancers On-Line Forum
    Member, Linkedin.com

  2. Alan,

    Thanks for the great response and information. According to the July 2009 “CMO Survey” by Duke University’s Fuqua School of Business and the American Marketing Association, marketers are starting to look up. However, marketers were not blind to still-lagging consumer spending. More than six in 10 recognized that one of their customers’ main priorities over the next year will still be low prices, with 34% characterizing that as their first priority. Another 62% put superior product quality as a high priority, though it was more likely to be secondary to price.

    “These results indicate that marketers believe the tide had begun to turn,” said Christine Moorman, professor at the Fuqua School of Business. “However, they are clearly aware that the recession has caused customers to become more price sensitive and companies are wisely keeping that in mind as they make product and marketing decisions.”

    The summary article reported by eMarketer was very interesting and can be found at: http://www.emarketer.com/Article.aspx?R=1007245

    Alan See

    LinkedIn Profile:
    Follow me on twitter: http://twitter.com/AlanSee


Please use comments to add value to the discussion. Maximum one link to an educational blog post or article. We will NOT PUBLISH brief comments like "good post," comments that mainly promote links, or comments with links to companies, products, or services.

Please enter your comment!
Please enter your name here