Shoppers are hyper-focused on ‘value.’ That doesn’t mean buying the cheapest option (2024)

By Parija Kavilanz, CNN

New York (CNN) — American households want the biggest bang for their buck right now when they pull their wallets out to shop. That doesn’t mean they want something cheap all the time.

They’ve been paying more for goods and services for a while because of higher inflation that stubbornly stuck around. What’s also occurred concurrently is that higher interest rates have made it more expensive for shoppers to borrow money – on credit cards for example – for buying things or paying off necessities such as monthly bills.

But even as consumers push through these pressures, they’re still shopping, and seeking deals. Bargain retailers like Walmart and Costco have benefitted, as shown by the retailing industry’s recent slew of first-quarter earnings releases.

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Discount behemothWalmart’s business was buzzing as thrifty shoppers flocked to its big-box stores last quarter to bag deals on groceries and everyday necessities like shampoo, toothpaste, paper towels and toilet paper. Sales at its stores open at least a year increased 3.8% in the quarter from the same time last year.

Other discount purveyors such as Ollie’s Bargain Outlet and Costco also enjoyed a jump in their same-store sales in their latest quarter.

At the same time, there’s a different kind of deal-seeking happening, too.

Perhaps a bit counterintuitively, a bunch of stores that are known for more expensive products that aren’t exactly necessities are also seeing a boom.

Which means that Americans are still spending, but selectively, and that “value shopping” means different things to different people. It doesn’t necessarily mean cheap.

“Value is a watchword for consumers,” said Neil Saunders, retail industry analyst and managing director with GlobalData Retail, in an interview with CNN.

“But value is not just about finding the lowest price. It’s about finding products that people really want and that they will get use out of,” Saunders said. “So gone are the random impulse buys of things that will be placed at the back of the closet and forgotten, and in are the more considered purchases.”

To his point, shoppers are willing to dig deeper if they they feel like they’re getting quality products that are on trend, feel good, and last for a long time, even if it means spending a little bit more.

Abercrombie & Fitch enjoyed a stunning 21% surge in its same-store sales last quarter because it hit the fashion trends that its core younger shoppers are craving, such as low-rise baggy jeans and well-tailored wide-legged pants, and then some.

The retailer, which also owns the Gen Z-favored Hollister brand, is pushing ahead for the first time into newer lucrative areas such as wedding items like bridal dresses and even pajamas as it strives to become a one-stop destination for its clientele.

Williams-Sonoma, which sells pricey kitchenware such as Le Creuset dutch ovens for a few hundred dollars each and $4,000 automatic espresso machines, also reported improving sales in the first quarter. (It also owns upscale home goods and furniture brands Pottery Barn and West Elm.)

“Our recent launches with partners, such as LoveShackFancy and Lilly Pulitzer, have driven sales and attracted new customers by tapping into relevant fashion and home decor trends,” Laura Alber, Williams-Sonoma CEO, told analysts during the company’s most recent earnings call.

Gap Inc., whose brands include Gap, Old Navy, Banana Republic and Athleta, pulled out same-store sales increases for the first time in years in its most recent quarter across all four brands under new CEO Richard Dickson, who came on board last August.

Dickson’s focus has been on getting back to the basics with quality products. This strategy included its newest summer linen clothing collection and surprise marketing moves involving celebrity collaborations. A Gap white shirt dress for Anne Hathaway appeared to thrill shoppers.

The dress became a viral moment on social media for the retailer, which Gap quickly seized upon by releasing a limited pre-order for the dress to its shoppers priced at $158. It sold out in under three hours.

Shoppers are homing in not just on prices but on the benefits that they hope to receive from products for the price that they’re paying for it, Zak Stambor, senior analyst, retail and ecommerce, with market research firm eMarketer told CNN.

“Consumers are thinking long and hard about where and when they are spending,” Stambor said. “A sizable segment of them are focused on value, however, that doesn’t directly correlate to a low price. Shoppers are willing to spend if they see value in an on-trend, well-made dress from Abercrombie – or a healthy salad from Sweetgreen.”

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Shoppers are hyper-focused on ‘value.’ That doesn’t mean buying the cheapest option (2024)

FAQs

Shoppers are hyper-focused on ‘value.’ That doesn’t mean buying the cheapest option? ›

A sizable segment of them are focused on value, however, that doesn't directly correlate to a low price. Shoppers are willing to spend if they see value in an on-trend, well-made dress from Abercrombie – or a healthy salad from Sweetgreen.”

What is a high value shopper? ›

A high-value customer spends 3-5X more than average customers and is a crucial brand loyalist. High-value customers make shopping from your brand part of their routine and are more likely to be brand evangelists. They purchase large orders from your brand more frequently.

What is a value shopper? ›

Value shoppers are savvy purchasers with a sharp eye for the best deals. They know where to find the best discounts and coupons.

What is a hyper shopper? ›

Shopping online rather than in-store

What separates hyper shoppers, however, is that they're buying more frequently and spending more – across an expanding range of categories and merchants.

What are high value customers? ›

A high-value customer is someone who heavily relies on your business. Your business values them because they help you generate more profits. These individuals are your most valuable customers, significantly impacting your profits and bringing you more business and sales than other customers.

What does value mean to customers? ›

What is customer value? Customer value is the customer's perception of the worth of your product or service. Worth can mean several things: the benefit these products or services provide to your target market, or the value for money they offer.

What are value-oriented customers? ›

Values-driven consumers shop more frequently and are more likely to try new brands and products—traits that make them valuable to retailers and brands.

What is the rise of the value shopper? ›

Driven by inflation and the rising cost of living, consumers are more conscious of their spending habits than ever before. This heightened financial awareness prompts individuals to seek value in every purchase, maximising their purchasing power without sacrificing quality or satisfaction.

What are the 8 types of shoppers? ›

We've put together information on the eight most common types of shoppers: Bargain Hunters, Browsers, Showrooming, Impulse Buyers, Mission-Driven, Indecisive, Educated, and Loyal customers. Using these shopper profiles to identify the types of shoppers your customers are.

How do luxury personal shoppers make money? ›

Personal shoppers may have the ability to earn commission based on the sales that they make, making this a potentially lucrative career if you're in the luxury market. Some retailers hire personal shoppers who use merchandising and styling skills to guide customers' purchases and increase the sale of particular items.

What is a high intent shopper? ›

High-intent shoppers*

Subscribers who've viewed or added a product to their cart but haven't purchased yet are clearly interested in your products.

How do I become a luxury shopper? ›

Whether you intern at a fashion magazine, get active on LinkedIn, or attend in-person fashion events, try to make as many connections in the fashion industry as you can. The more people you know, the greater your chances of landing luxury personal shopping assignments.

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