What U.S. shoppers want from their markdowns

In April 2024, Retail Insight conducted bespoke consumer research into understanding what U.S shoppers wanted from their markdowns.

As the cost of living continues to place pressure on the budgets of millions of U.S. shoppers, finding ways to reduce grocery costs (by way of purchasing discounted or 'marked down' items) is more important than ever before.

In fielding this study, we were keen to deepen our awareness of what shoppers really want where discounts/markdowns are concerned.

We wanted to gain insight into shopper preferences around:

• Markdown label color (preferred)
• Markdown label color (most eye-catching)
• Markdown label color that made shoppers most likely to buy
• Markdown label wording (preferred)

Where markdown label color was concerned, red emerged as the most preferred color.

Retailers would be advised to avoid coloring their markdown labels in green and orange; these colors were preferred by only 23.4% and 23.8% of shoppers respectively.

When asked about markdown labels that made shoppers 'most likely to buy', red won out again (43%), followed by yellow (37%). The colors least likely to encourage U.S. shoppers to purchase discounted items were white (24.3%) and pink (24.4%).

Markdown label wording

When asked about wording, 52% stated that they found the word 'Reduced' to be impactful (in terms of signposting a markdown). However, this impact varied widely among generations, rising to 69% among Baby Boomers and dipping to just 28% among Gen Z shoppers.

Generational differences were also observed across responses to other wording options:

In contrast, the least impactful words for U.S. shoppers when used on markdown labels were 'Value' (16%), followed by 'Special promotion' (17%).

90% of those surveyed said that seeing the original price of a reduced item (e.g. 'Was $XX, now $XX') on the markdown label would be more likely to make them buy it.

However, 46% of those that agreed also said they would only buy it if they felt the saving vs the original price was 'significant enough'.

80% of those surveyed agreed that seeing a percentage saving of a reduced item (e.g 'XX% off') would be more likely to make them buy the item in question.

In this instance, the proportion of those that agreed they would only buy it if they felt the proportional saving compared to the original price was 'significant enough' was also 46%.

Male shoppers were marginally more inclined to buy an item where the proportional saving on a markdown label was visible than their female counterparts  (82% vs 79%).

Demand for and attitudes towards markdowns

Our research proves the popularity of discounted items; 69% of U.S. shoppers say they specifically look for marked-down produce in-store, rising to 73% among Millennials.

76% of U.S. consumers say that offering marked down products improves their perception of a grocery retailer's value for money, with 35% of those that agreed claiming that their perception was 'significantly improved'.

8% of those surveyed agreed that reduced prices on near-expiry goods had no impact on their perception of a grocery retailer's value for money.

8% of those surveyed agreed that offering markdowns reduced their perception of a grocery retailer's value for money.

52% of those surveyed agreed they would be more willing to buy a product if the corresponding markdown/discount label in a grocery store included messaging such as "help us reduce food waste".

Popularity of markdowns per category

Meat (38%) was the top product category where consumers most wanted to see markdowns being made, rising to 45% among Baby Boomers.

Gen Z and The Silent Generation were the only two demographic groups not to rate Meat as their most preferred product category for markdowns, at 28% and 30% respectively.

Bakery (23%) was the second-highest ranked product category where consumers most wanted to see discounted products available.

Interestingly, The Silent Generation and Gen Z were the only two demographic groups to rate Bakery as their most preferred product category for markdowns, at 33% and 25% respectively.

Retail Insight's recommendations

Creating the perfect markdown label: 

Conclusion

In creating the optimum markdown label - the most 'shopper-friendly' sticker - including the correct color and wording is key to achieving long-lasting success.

Listening to your customers and delivering, via a dynamic markdown solution, their preferred label at shelf-edge will:

• Enable your discounted products to reach more shoppers
• Increase shopper perceptions between your retail brand and the provision of value-for-money
• Drive overall customer satisfaction levels
• Reduce food wastage
• Encourage maximum sell-through on expiring products

To learn more about WasteInsight, the dynamic markdown solution we provide at Retail Insight, click here.