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Frugal Shoppers: The Untapped Shopper Base You Can Reach to Win the Holiday Sales Season

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It’s never too early to start preparing for the holiday shopping season, especially this year as brands and retailers are gearing up for ‘Shipageddon’ part two. The upswing in ecommerce sales from COVID-19 led to Shipageddon 2020 as brands and retailers couldn’t keep up with significantly increased demand. Holiday shoppers faced stockouts, long delivery times and fewer discounts in general.

Unfortunately, things aren’t looking much brighter this holiday sales season; the global supply chain is still jammed and sellers are still struggling with last-mile delivery constraints, warehouse capacity constraints and freight constraints. According to Forbes, “UPS says that delivery demand during the 2021 peak season will exceed capacity by 5 million packages per day.”

As stressful as Shipageddon was (and as daunting as a second one may seem), brands and retailers rejoiced over a 47% increase in ecommerce sales over the previous year’s holiday season, a trend that we can expect to see again this year. Smart brands and retailers will take advantage of an extended holiday season by giving consumers what they need and by focusing on a particular shopper base that might not have been on their radar last year: frugal shoppers.

What are Frugal Shoppers and Why do They Matter?

While the pandemic accelerated ecommerce demand, it also changed the way consumers shop online, increasing the number of ‘frugal shoppers.’ This shopper base is made up of consumers who only want to buy at a discount. With more and more shoppers spending time at home due to the pandemic, consumers started to enjoy the convenience of comparing multiple products and prices at a higher rate than before.

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Price comparison shopping is easy in the digital world, and these savvy shoppers will put in the work to find the best deals. According to Google, customers searching for a “discount code” has increased by 50% in the last year. To win this holiday season, finding and reaching frugal shoppers is critical. Below are three key strategies for capturing this untapped shopper base.

Delighting Customers with a New Pricing Strategy

With frugal shopping on the rise, pricing strategy and demand should be on the minds of brands and retailers. Especially after last year’s holiday season when we saw fewer discounts, consumers are determined to find the best deals before prices get raised. You might be familiar with a pricing strategy called price segmentation from industries like hospitality and travel, but it can actually work for retailers, too. Price segmentation allows retailers to reach more of the marketplace by offering the same products to consumers at varying prices, capturing the most sales revenue possible.

If you’re new to this pricing strategy, consider working with a partner that knows how to reach frugal shoppers without violating pricing policies, as well as ensuring that your customers don’t see that you’re advertising lower prices and feeling like they’ve overpaid.

Surviving the Surge by Load-Balancing Operations

Since COVID-19 and notably during last year’s holiday season, retailers have struggled to meet consumer demand and keep up with what’s in stock. Retailers face short lead times, rush orders and overwhelmed warehouses, especially big warehouses like Amazon’s. According to Forbes, Amazon faced the biggest challenges in 2020, and “some sellers [were] negatively affected by inventory storage limitations that impacted their ability to keep items in stock.”

The good news is that consumers are doing their holiday shopping in advance this year. They’re prepared for longer lead times and don’t mind waiting if it means getting the best deal. Therefore, retailers can load-balance their operations, shifting order processing to less busy days to avoid overwhelming warehouse operations.

Dashing to New Digital Channels

By now, most brands and retailers have explored legacy online channels, whether from their own websites or through marketplaces like Amazon. These come with obstacles such as significant overhead for maintaining these channels with a high cost-of-sales, high fees and high fulfillment costs. When working with traditional ecommerce channels like Amazon, there is no ownership of the customer relationship, and the retailer’s ability to sell more and maximize customer lifetime value is removed.

Most retailers are aware of these obstacles but don’t know what else to do. Luckily, they now have the option of working with new digital channels or third-party brokers that let them own the customer relationship with no cost of new customer acquisition. Now is the time for retailers to expand into these new digital channels.

If you want to be successful this holiday season, these strategies will help you get there. Finding and reaching frugal shoppers should be at the forefront as we head into the holiday season and beyond.


Steven Hong, CEO of Discount Bandit, is a business leader with deep expertise in ecommerce, culture building and technology. He is a serial entrepreneur and has launched many ventures, his most recent being Discount Bandit, a new kind of online shopping experience.

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