The idea of “cheap” in retail is no longer what it used to be. Platforms such as Temu and Shein are changing how Australians judge value and shaping new price perception. Traditional discount chains like The Reject Shop and Big W once held the low-price crown. Now they are losing ground. Recent research shows the “cheap” anchor is shifting.
In this environment, the real problem for many retailers isn’t that they are too expensive. The problem is that they never truly understood what customers value beyond price. In the face of this change, you can’t just be “low cost” and win. Trust, clarity, and transparency matter.
 >Download Now: Free PDF A Capability Framework for Pricing Teams
Online Marketplaces Are Reshaping Cheap Price Perception
Online disruptors are rewriting the rulebook. Temu and Shein offer ultra-low cost, global sourcing, and slick online UX. They bring speed, visibility of pricing, and easy returns. They make consumers feel in control. In contrast, many physical stores still rely on cluttered promotions, big signs saying “down, down”, and discount campaigns that customers increasingly view as gimmicks — a shift that’s redefining price perception across cheap retail stores.
Data shows that while Big W and others have seen their “low price” associations drop over the past five years, online players are seeing gains: Temu’s “low price” perception has risen from ~34% to ~41% since October 2024 (+7 ppt). Shein has climbed from ~23% to ~27% (+4 ppt).
In short, the price anchors — the mental reference points shoppers use to judge value — are collapsing in some categories. Some would say, “Cheap is getting even cheaper,” reshaping the meaning of cheap price and forcing retailers to rethink their retail value proposition.
Capability Building Programmes For Pricing & Sales Teams!
Understanding Value, Behaviour, and Consumer Price Perception
Australians haven’t changed their minds about value. What has changed is their reference point — and their price perception. They now expect fairness, consistency, and clarity. They want the price to make sense in context. What’s more, they want convenience and reliability.
For example, a shopper might say: “Yes, that shirt is cheap — but is the checkout easy? Is the delivery fast? Is the sizing accurate? What about the returns policy?” They are weighing more than just the price tag, reflecting a more complex consumer price perception.
Online-first platforms succeed because they deliver this broader retail value proposition. They show pricing, set expectations, and deliver. Physical stores still lean heavily on “sale” signage and discount banners — but when the rest of the value chain doesn’t stack up, the price alone doesn’t win.
Businesses need to track how their customers perceive value across channels. Use both behavioural data (transaction logs, returns, online vs in-store) and attitudinal feedback (surveys, net promoter score, customer comments). That helps you understand the meaning of a cheap price in your category — and how you compare.
Will Shoppers Pay More for a Better Retail Experience 🛍 Podcast Ep. 90!
What the Shift in Price Perception Means for Traditional Cheap Retail Stores
Data speaks clearly. The Reject Shop has seen an 18 percentage point drop in its “low price” price perception since 2020. Big W is down ~10 ppt. Target is down ~7 ppt. In contrast, Amazon is up ~7 ppt in the same period.
This tells us that being “low cost” isn’t enough. The retail value proposition must change. But many legacy retailers never fully adjusted. So when consumers shift their consumer price perception, those who relied purely on being “cheap” fall behind. The entrance of Dollarama via The Reject Shop adds more competitive pressure among cheap retail stores.
In other words, your low-cost positioning might still be intact — but the bar for what qualifies as the meaning of cheap price has moved. For many traditional players, it means reinvention rather than minor adjustment.
Lessons for Pricing Teams on Managing Price Perception Across Channels
If your pricing team is still using the same logic across online and in-store, it’s time to change. Here are some key points:
- Track customer price perception across both channels. What do people think the meaning of cheap price is online? And how does that translate in the store?
- Recognise that one-size-fits-all promotional strategies no longer work. Channel, audience, and category demand differentiated logic.
- Align internal pricing frameworks to reflect perceived value — not just cost plus margin. If your price seems fair, clear, and consistent, you build trust and a stronger retail value proposition.
- Ensure pricing communication is transparent: avoid the “fake sale” problem. Consumers increasingly spot and resent inflated original prices or repeated “Was/Now” campaigns that don’t deliver real value.
- Use real-time and segment-level data to adapt. For example, what’s the price elasticity online? What’s the carry-through in-store? Where are the drop-offs? Use that insight to set smart, channel-specific strategies that enhance consumer price perception.
Pricing Recruitment For Pricing Managers!
How Executives Can Strengthen Retail Value Proposition and Price Perception
To senior leaders, stop chasing the “cheap” badge as your primary differentiator. It’s a weakening strategy. Instead, focus on rebuilding credibility and trust through data-driven, transparent pricing that strengthens price perception.
Ask yourself, “Is pricing in our business visible and understood by our customers? Do we explain why one price is different or why one channel costs less? Are we consistent across channels? Do we leverage convenience, reliability, and service as part of our retail value proposition?”
Price alone no longer wins. What wins is a combined value proposition: fair price + clarity + seamless experience. Your strategy must reflect that. Consider investing in systems and culture that support real transparency in pricing and value. Build pricing capability as a strategic asset that shapes positive consumer price perception.
In board talks, don’t just say “consumer preferences are changing”. Instead, say: “We didn’t truly understand our customers’ value drivers. We are now recalibrating our pricing and meaning of cheap price for the new normal.”
〉〉〉 Get Your FREE Pricing Audit 〉〉〉
The New Rules of Pricing and How to Build Positive Price Perception
In summary, online marketplaces are resetting what “cheap” means in Australia and reshaping overall price perception. Legacy retailers must adapt or risk being left behind.
If your business still competes on price alone, it’s time to rethink. Focus on transparent, consistent pricing that aligns with customer value and strengthens your retail value proposition. Monitor how shoppers perceive value, differentiate across channels, and build a credible, data-led pricing strategy that reflects the true meaning of cheap price.
We understand it can feel overwhelming. That’s why we’re here to help. Together, we can review your pricing, align it with customer value, and create a strategy that works. Reach out today, and let’s explore how your business can stay competitive, trusted, and profitable in this new consumer price perception landscape.
For a comprehensive view of integrating a high-performing capability team in your company, Download a complimentary whitepaper on A Capability Framework for Pricing Teams.
Are you a business in need of help aligning your pricing strategy, people and operations to deliver an immediate impact on profit?
If so, please call (+61) 2 9000 1115.
You can also email us at team@taylorwells.com.au if you have any further questions.
Make your pricing world-class!
