Product and service reviews are conducted independently by our editorial team, but we sometimes make money when you click on links. Learn more.
Archive Archive

Specialty Stores Can Charge More, Study Finds

shopping . / Credit: Specialty Store Image via Shutterstock

Specialty stores don't need to lower prices to compete with their bog-box competition, new research shows.

Researchers at the University of Buffalo found consumers not concerned about higher prices when shopping at specialty stores, and they are also more likely to purchase multiple items when there.

As part of the study, researchers analyzed data from 225 households, comparing candy sales in supermarkets to sales in specialized confectionary stores. They found that shoppers preferred buying premium items, like boxed chocolates, from the specialty stores and were not averse to paying higher prices for them in comparison to similar items at supermarkets.

In addition, the results showed that consumers were more likely to buy additional premium candies when at confectionary stores, compared to at the supermarket where they were less likely make any related purchases.

The study also discovered that promotions featuring sale prices at specialty stores don't have as great an effect on increasing sales as similar lower-price promotions at the larger markets. Instead, consumers responded more favorably to promotions featuring seasonal or holiday themes, such as Valentine's Day or Easter items.

The study's authors — assistant professor Ram Bezawada, professor Minakshi Trivedi and graduate students Ashish Kumar and and Karthik Sridhar — believe that specialty retailers can benefit from the study by adjusting their sales strategy to focus on premium selection, cross-category items and holiday promotions, rather than price cuts, to increase sales.

Follow Chad Brooks on Twitter @cbrooks76 or BusinessNewsDaily @BNDarticles. We're also on Facebook & Google+.

Chad Brooks

Chad Brooks is a Chicago-based writer and editor with nearly 20 years in media. A 1998 journalism graduate of Indiana University, Chad began his career with Business News Daily in 2011 as a freelance writer. In 2014, he joined the staff full time as a senior writer. Before Business News Daily, Chad spent nearly a decade as a staff reporter for the Daily Herald in suburban Chicago, covering a wide array of topics including local and state government, crime, the legal system and education. Chad has also worked on the other side of the media industry, promoting small businesses throughout the United States for two years in a public relations role. His first book, How to Start a Home-Based App Development Business, was published in 2014. He lives with his wife and daughter in the Chicago suburbs.