UF Study: Shopper Thriftiness Outweighs Consumer Satisfaction

October 2, 2003

GAINESVILLE, Fla. — Coupon clippers, you rule: The chance to save a buck outweighs store satisfaction among penny-pinching shoppers, a new University of Florida study has found.

At a time when a growing number of businesses are offering buying incentives, most price-conscious consumers prefer to shop around for the best price rather than to buy everything at a single store that may satisfy their preferences, according to a study conducted by Anne Magi, a UF visiting scholar of marketing.

“Economically conscious consumers are more prone to compare prices between the stores available to look for the best deals,” Magi said. “For these people, satisfaction with a particular store is not as important. They may have a favorite store, but they still prefer to shop around,” said Magi, who defined satisfaction in the study as a store’s ability to meet shoppers’ expectations and desires.

That’s a healthy sign for the uncertain U.S. economy, indicating that consumers adapt to a competitive market in order to take advantage of the options available, Magi said. By doing so, consumers have more freedom to find bargains rather than feeling forced to pay a single fixed price, in turn encouraging spending.

While customer satisfaction is still important in enticing more customers to visit their stores, the research indicates that retail managers seeking to keep their businesses growing should look at other variables, such as their customers’ attitudes toward bargain values and individual preferences.

For the study, Magi surveyed 643 households in a Swedish town with four competing grocery store chains, all with loyalty-card programs that reward consumers for their business. Households were asked to record on a questionnaire for four weeks what stores they shopped in, how much they spent and their satisfaction with their primary store. The results, published in the summer edition of the Journal of Retailing, found the typical shopper spread purchases evenly across an average of 3.8 stores regardless of satisfaction level in their primary store.

Nearly three-quarters of the respondents were women, making it difficult to measure the shopping behavior differences between genders, Magi said.

And those loyalty cards seem to indicate shoppers are anything but, with the study finding more than half of respondents held two or more of them, signifying their tendency to shop in numerous locations, Magi said.

In fact, only 5 percent of the shoppers surveyed confined all of their purchases to a single grocery store.

While the study was conducted in Umeå, a Swedish town of 100,000 residents, Magi said she expected the effects also would hold true in the United States, which has a free-market economy similar to Sweden’s. The research was conducted during the fall of 1999 while Magi was living in Sweden.

Particularly as the U.S. economy continues to shift, the results indicate it is becoming increasingly important for retailers to take into account what consumers are seeking. Strategies containing elements that appeal to different customers would be the most beneficial, providing retailers the ability to cater to both the loyal and the indecisive consumer, Magi said.

Despite the obvious popularity of buying incentive card programs, the study also reveals their limitations.

“When it comes to satisfaction and loyalty, retailers can’t expect consumers to react in a similar way,” Magi said. “It is most profitable to cultivate relationships with customers who have a tendency to be loyal to one store, but managers shouldn’t forget about the other shoppers.”

The findings can be applied to other industries as well, particularly the airlines. Because fliers often have wallets filled with different airline cards, competition compels travelers to value affordable prices and convenience over satisfaction, Magi said. With the high level of competition, many frequent travelers are more inclined to spread their trips across two or three airlines in order to have more flexible itineraries while also allowing them to take advantage of the lowest possible fares.

Claes Fornell, director of the National Quality Research Center at the University of Michigan Business School, agreed, adding that most consumers are loyal to a set of stores rather than a single outlet, but it is their satisfaction with the stores that keeps them coming back for more.

“Customer satisfaction is an outcome of buyer-seller interactions as well as of subsequent consumption experiences,” said Fornell, whose center analyzes data for the

American Customer Satisfaction Index. “In both cases, buyer satisfaction is affected by the availability of consumer choice alternatives, product quality, customer selection by the seller and buyer information.”

Especially in times of slow economic growth, consumers concerned with finding the best deals on the market are less likely to be affected by the satisfaction factor.

“Customer satisfaction determines which stores people shop in but not necessarily how much they spend in that store,” Magi said.