Hey big spender!
Online bargain hunters end up spending up to 50% more than those who always pay full price on the internet, according to a new study.
PayPal’s annual UK online retail report found that 43m Britons were constantly on the lookout for special offers and promotions, with 30m using discount vouchers in the last six months.
It classified shoppers into four groups, from ‘cut throat’ keen bargain hunters at one end of the scale, to ‘uncut’ shoppers who usually pay full price.
But, found the report, ‘cut throat’ shoppers spend up to 50% more online than their ‘uncut’ peers, spending an average £823 more on internet purchases. On groceries, ‘cut throat’ shoppers spend £639 in six months, 27%, or £135, more than the average online shopper’s spend of £504. Meanwhile, those buying travel services spent an average £1,060 compared to the overall average £961.
Cameron McLean, general manager, merchant services at PayPal UK, said: “Our research shows that online bargain hunters are often the biggest spenders. That’s good news for retailers as they recognise that lower prices can be good for business.
“But it’s also great for a new generation of shoppers who expect to get better value for money.”
The study also found a split on gender lines. Some 93% of women were always looking out for special offers, found the report, compared to 84% of men.
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What about profitability?
The bargain hunter may spend more but are they profitable? If those Cut Throat travel bargain hunters achieve more than a 10% discount they will be less profitable than the Uncut.
“Turnover is vanity, profit is sanity but cash is reality” is the Bankers Mantra and it needs to be applied to ecommerce just as much as any other business.
Upgrading online marketing reports to be focussed on profitability rather than conversion rate CPC or CPA does give much greater visibility of true success.