The Globe's monthly roundup of research from business schools.
While most Canadians appreciate a sale, they are divided over whether they are actually getting a good deal, according to an online poll conducted by Legerweb, a division of Leger Marketing, for the Queen's School of Business.
According to the survey, 91 per cent of respondents said they receive "great happiness" from a good sale, but just 49 per cent said they believe they are saving money when buying discounted items. Almost the same percentage, 45 per cent, said they believe stores inflate the regular price of a product before marking it down.
The results show consumers are becoming increasingly sophisticated largely as a result of social networking sites, which allow them to share pricing information and figure out pricing patterns, says Yuri Levin, professor of management science and operations management at Queen's in Kingston. "The Internet has created an entirely new strategic consumer that companies need to be aware of," he says.
The survey also reveals that the majority of respondents comparison shop – and not just for big-ticket items such as electronics or furniture. Eighty-two per cent said they compare prices for everyday items including groceries and household supplies. Almost 90 per cent said they are likely to tip off friends about good sales they discover. Nearly two-thirds said they believe that certain goods and services, such as cellphone plans, cost more than the advertised price and half said they feel the same way about airline tickets, cars, cable and digital TV services and cellphone roaming plans.
These increasingly price-savvy shoppers have become adept at sharing information with one another and putting pressure on retailers to offer Black Friday type blow-out sales year-round, Dr. Levin adds.
At the same time, retailers are becoming more sophisticated at tracking customer purchasing habits largely through in-store loyalty programs and other means and then using the information to set prices. And the price they charge one customer may differ from what they charge another. While this type of so-called differential pricing has been common in certain segments such as the airline industry for some time, the practice is becoming increasingly widespread, Dr. Levin notes.
"Differential pricing is working because it is the only way for retailers to take into account the growing sophistication of consumers in the era of social networking," he says.
The survey was conducted online between April 20 and 24 with a sample of 1,516 Canadians. It has a margin of error of plus or minus 2.5 per cent, 19 times out of 20.
Vision-impaired shoppers face significant hurdles
Depending on your point of view, an afternoon of shopping can be either a tiresome chore or a few pleasant hours of self-indulgence. But for those with low vision, shopping is an altogether different kind of experience that poses significant hurdles at almost every step of the way, according to research by Ryerson University's Ted Rogers School of Retail Management in Toronto.
"Until you put yourself in their shoes, you really don't know the actual subtle challenges they face," says Hong Yu, co-author of the study and interim director of the school. "Completing the study was really an eye-opening experience for me."
In what is believed to be the first Canadian study of its kind, Dr. Yu and Sandra Tullio-Pow, a professor in Ryerson's fashion faculty, examined the needs of visually impaired shoppers and the obstacles they face.
Regulations passed by the Ontario government a decade ago require businesses and organizations in the province to be fully accessible for the disabled by 2025. Although retailers are generally in compliance with the law, shoppers with low vision still face many challenges that limit their independence, Dr. Yu says.
For the study, the researchers conducted focus group interviews with 17 participants with low vision. The participants cited getting to and from the store, dark wall colours and store lighting that was either too low or too bright. They also reported having difficulty distinguishing between shades of clothing colour and reading the fine print on clothing labels and tags. Paying for purchases was also stressful because of their inability to read sales receipts or difficulties using debit and credit card machines. They also reported problems dealing with sales associates who were either reluctant to serve them or provided inappropriate assistance.
The report recommends that stores have a logical layout with unobstructed aisles, easy-to-read signs and uniform non-glare lighting throughout. It also recommends providing receipts with large fonts and, if possible, an audio-enhanced checkout system that announces the price of the purchase. It says sales associates should receive better training on how to provide appropriate assistance to customers with low vision and on the aids they use.
More than 836,000 Canadians are visually impaired. While low vision affects those of all ages, it is more common among older people. Providing accommodations will help these shoppers feel welcome, foster customer loyalty, and ultimately allow retailers to reap financial rewards, says Dr. Yu.
It was the first study Dr. Yu has conducted on people with disabilities but the experience has spurred her to refocus her research on the needs of Canada's aging population. "I feel like a lot needs to be done and there's a lot of information that should be shared with society," she says.
The study was published in the May issue of the Journal of Retailing and Consumer Services.
The upside of counterfeit products
Counterfeit products, ranging from designer handbags to pharmaceuticals, have proliferated in recent years. The Organisation for Economic Co-operation and Development has estimated the value of counterfeit goods at about $250-billion (U.S.) a year. While knockoff products can cost legitimate manufacturers in lost sales, and in some cases raise health and safety concerns for consumers, there's an upside, too.
Yi Qian, associate professor of marketing and behavioral science at the University of British Columbia's Sauder School of Business in Vancouver, and her co-authors tracked sales, prices and other financial data of 31 brand-name producers of leather and athletic shoes and the corresponding knockoffs sold in China from 1993 to 2004, a time when counterfeiting surged in that country.
The researchers also compared product characteristics to assess quality including the materials used, comfort, support and other features. They compared shoe characteristics before and after the counterfeit versions entered the market.
They found that the entry of the counterfeit goods spurred authentic manufacturers to produce more appealing products. In the case of the shoe manufactures, they upgraded production equipment and the materials they used to construct the surface and sides of the shoes in order to improve their overall appearance. However, they made little to no improvement to the shoes' functional quality.
The study is to be published in a forthcoming issue of Marketing Science.
Rosanna Tamburri can reached at firstname.lastname@example.org