Show Class for Price Image

Your store’s price image (SPI) is the general belief your target markets hold about whether your store charges high, medium, or low prices. SPI is an overall impression rather than a detailed memory by the shopper of the precise price your store charges for each item. There are items which always have a highly disproportionate influence on SPI because shoppers do track and compare. Still, research finds that SPI is influenced to a greater extent in the long term by factors such as the range of prices in your store, the frequency with which you offer promotional discounts, and the size of those discounts.
     Researchers at Eastern Michigan University and Seattle University find that another significant determinant of SPI is the retail format classification your target audiences perceive you to have. Six store classes explored in the studies were specialty, drug, convenience, grocery, mass merchant, and club.
     The study results indicated that consumers associated the first three of those with a high price image and the last two with a low price image. The grocery store format was not associated clearly with either a high or low price image. This suggests, in a way consistent with other research, that shoppers carry a set of varying price images for grocery stores. “They’re high if you’re looking for meat or fish, but I find great bargains in the bakery in the early afternoon.”
     Because the perceived format class influences your SPI and SPI in turn influences people’s interest in shopping with you, consider into what class you want your target audience to place you. The determinants of class used in the research included:

• Convenience. Higher price image for convenient location and many hours of operation 
• Customer service. Higher for courteous staff and liberal return policies 
• Selection. Higher for many different product categories and many options within product categories 
• Ambiance. Higher for cleanliness and pleasant lighting 

     Project your format class by how you provide these attributes to shoppers, how you publicize these attributes, and the classifications of stores you use in comparative advertising.
     A class associated with a higher price image allows you to more comfortably set higher profit margins for items available through other outlets. A benefit you might not anticipate is gift card sales. Researchers at Washington State University and Saint Joseph’s University found that, although recipients tend to prefer cards from non-luxury stores, givers prefer purchasing cards from luxury stores.

For your success: Retailer’s Edge: Boost Profits Using Shopper Psychology

Click below for more: 
Discount Lighthouse Items for Low Price Image
Slap the Category for Price Image Effect
Begin Gift Card Users with Store Typicalities