Price Magic: Capturing sales in a value-driven market

In today’s retail landscape, shoppers are more empowered than ever. With access to countless options, price comparison tools, and coupon and Cash Back platforms, they’ve become savvy, value-driven, and selective in their purchasing decisions.

For brands, this creates a unique challenge: how do you capture the attention of these informed consumers, drive engagement, and convert them into loyal customers—all without eroding brand value or profitability?

Price Magic represents a strategic solution to one of the most pressing challenges in modern retail: staying competitive in a crowded, value-conscious market.

Pricing hunting is an enduring shopping behavior

Price hunting has become a cornerstone of modern shopping behavior. According to a study by Statista, 83% of consumers actively compare prices before making a purchase, and 81% of shoppers say they are more likely to buy from a brand that offers better value.

Over the last few years, we’ve seen a shift in consumer behavior, with a consistent focus on value over discretionary spending that persists beyond times of economic uncertainty. Consumers are still shopping, but they do so cautiously, ensuring every dollar is well spent. In this environment, value reigns supreme.

Adding to the challenge, marketing costs are steadily climbing. McKinsey reports customer acquisition costs (CAC) have risen by over 60% in the past five years, driven by increased competition and the complexities of digital advertising. Brands are pouring resources into traditional (and often expensive) acquisition strategies, only to struggle with converting shoppers into buyers.

The disconnect lies in the approach: brands often try to push their products onto shoppers, but what consumers truly want is to feel empowered. They want to make confident, informed decisions about their purchases.

Understanding the ‘magic’ behind Price Magic 

Rakuten’s Price Magic solution helps merchants increase market share by redirecting potential customers from competitor sites back to the Rakuten merchant’s online store. By offering Cash Back and price savings as incentives, Price Magic enables merchants to competitively position their products, attracting purchase-ready shoppers and increasing sales.

Here’s how it works.

Step 1: Identifying Product Match
When one of the millions of Rakuten Extension Shoppers views an item, Price Magic cross-references unique product identifiers on the page with inventory databases across multiple retailers to identify an exact match.

Step 2: Surfacing the Best Deal
Price Magic then determines the most competitive offer across websites, factoring in price savings and cash back rewards. This information is displayed to the shopper, eliminating the need for them to switch tabs or use third-party price comparison tools.

Step 3: Capturing Sales
If the shopper clicks on the better offer, they are seamlessly redirected to the partnered retailer’s site to complete their purchase. This process builds shopper confidence, knowing they’re getting the best deal, while brands capture sales that might have otherwise gone to competitors.

Meeting shoppers exactly where they’re at

Price Magic doesn’t disrupt the shopping experience—it enhances it. By highlighting potential savings at the point of purchase, it empowers shoppers to feel confident in their decisions. Whether confirming that they’re already getting the best deal or presenting a better offer, Price Magic aligns with the value-driven mindset of today’s consumers.

For brands, this approach offers significant benefits:

Driving results without undermining brand value

Retailers in a competitive market are hyper focused on driving sales without cheapening their products or eroding their margins. Traditional discounting strategies, while effective in the short term, can have long-term consequences for brand equity and margin. By offering savings in the form of Cash Back and flagging these offers with Price Magic, brands can remain competitive while maintaining their premium positioning.

Enhanced visibility with new and existing customers

Because Price Magic is designed to surface the best deals, it not only helps brands capture sales but also introduces them to new customers who may have never shopped with them before. As long as the offer is competitive, Price Magic ensures that brands can stand out to value-driven shoppers, creating opportunities to build relationships with first-time buyers.

Shopper-centric experiences will continue to dominate

As shopping technologies continue to evolve, one thing remains constant: the importance of putting the shopper first. Brands that stay attuned to consumer behavior and prioritize value-driven experiences will be the ones that thrive in an increasingly competitive market.

Click here to learn more about Price Magic.