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Forrester: Having Different Web/In-Store Prices Is No Big Deal
A survey in the report looked at how consumers say they’re most likely to react when confronted with conflicting online/offline pricing. It was a multiple-choice question that permitted more than one response. The overwhelmingly most popular response (chosen by 60 percent of respondents): “Purchase the product with the lowest list price, whether it’s online or in store.”
Sixty percent chose that answer? I really want to meet the 40 percent of consumers who, when presented with a “multiple responses accepted” question, did not choose that option.
The report also detailed a few very concrete steps that retailers can take to deal with the pricing consistency issue. First, don’t forget the age-old FUD tactics. “In the long run, retailers will have no choice but to push the age-old strategy of unique SKUs and bundles available only in their stores in order to obfuscate the fact that an item may be cheaper elsewhere,” the Forrester report said.
Mulpuru said it was less a matter of confusion than being pragmatic. “There are always TVs that aren’t exactly the same. There’s nothing wrong with having Wal-Mart-specific SKUs,” she said, adding that the original premise behind brand-specific SKUs was that it legitimately prevented a store from accidentally accepting returns from competitors.
But it has the side benefit today of making price comparisons more difficult. “You force a little bit of extra work for the consumers to price compare,” she said.
Another approach is to refocus the attention from price to, well, anywhere else. “When you can’t win on price, how do you get around that? You throw in gifts on purchase plus other benefits such a free warranty or some chotskies,” Mulpuru said.
There’s also the tactic of using extreme time limits, to pretty much make it impractical for someone to be able to price compare.
“One lesson to be learned from fashionable companies like Gilt Groupe and HauteLook is how to discreetly price-discriminate under the radar. Private sales that are only accessible through E-mail links for a short period of time are one approach that we’ll likely see more companies engaging in during the years to come,” the Forrester report said. “Other vendors, like Runa, are offering retailers the opportunity to make offers that expire once a consumer exits a Web session. Calls to action like this can keep customers on a single retail site and make them less likely to leave the site and shop around for better offers.”
If none of that works, Forrester suggests another time-honored tactic when a rival is underpricing you: Sick the cops on ’em.
“Companies should use solutions to help them monitor MAP violations. These are available from vendors like Where 2 Get It and The Brand Protection Agency. They can also crowd-source this process by inviting customers to E-mail screenshots of any lower prices they’ve found from competitors and then asking their buyers to address the violation issues with their partners,” the report said. “Manufacturers generally will not take responsibility in these situations and will usually blame their distributors. But when confronted with physical evidence, they will be forced to be more vigilant of violations of MAP.”
-Marc
April 8th, 2010 at 1:05 pm
This study is just plainly unreliable. Every person I know checks out the pricing between the web and the store! Just last week we found prom dresses in the JC Penny store for 90.99, and on the website for 59.99! As she had bought the dress in store, and then was sharing the dress with her mom by internet, she found the discrepency and is now embroiled with trying to get her refund for the difference. And JCPenny is giving her a hard time! The net result…about 5 people will now refuse to ever go into a Penny’s store! Is that the result you want! It is bad business to try to manipulate and cheat the customer! Be ethical when pricing! That is the only way to have a successful business.
April 8th, 2010 at 1:14 pm
Would be very interested in the actual Forrester report but couldn’t find it utilizing the data search provided here. What is the title of the report?
April 9th, 2010 at 3:15 am
Sucharita’s report is titled:
Higher Prices In Your Stores: OK Or Not?
How Consumers React When Store And Web Prices For An Item Differ
April 11th, 2010 at 2:38 pm
this report is from someone who obviously interviewed lots of people but isn’t involved in e-marketing to consumers or pricing. We know consumer shopping habits have changed post crisis .. across socio economic groups.. in the US and globe..and that price transparency is as important to a growing population in Mexico as it is in San Diego. Forrester is right only about the level of complexity here.. but most major store based retailers have processes to match site and store.. with the lower of the two prevailing when the shopper..and how to incorporate couponing/marketing
We think the real price challenge begin as social shopping with igital token/coupon exchange becomes a reality – transparency and data integrity will be the golden rule for e
April 12th, 2010 at 3:32 pm
This research does not seem to have been designed well, because what people answer on a form about simply choosing the lowest price and buying that whether it is online or in-store does not reflect the reality of making a purchase – what if you are in a hurry and need to buy a gift, but the in-store price is more expensive and you have to collect it in time, thereby forcing you to pay more, when you know it could be had for less? That would generate ill-will from customers and isn’t necessarily a good move.
In my experience, it depends on the store attitude, I have often been in shops where the in-store price is higher than the online price, but I will pull out my iPhone and load up a price comparison site and show them not only their own lower price online but that of other stores offering a better deal, and most times they will offer to match the best price – I guess the way they see it is to make a small profit and retain a customer than to make nothing at all.
April 12th, 2010 at 7:18 pm
I agree, 60% Only…REALLY?? Everyone I know Shops Online. Everyone I know subcribes to their Favorite store’s emails to get the best pricing available on things they were gonna buy anyway. Online Shoppers are Savy Consumers. There is no reason to pay 100% retail except for the fact that you want something RIGHT NOW.
Even so, there are many sites where you can order online & do a Store Pickup within hours like Best Buy, Office Depot, Staples etc…. and that list grows longer everyday. Others do Site-to-Store like Walmart & it doesn’t cost you a penny extra. It’s all about Time management for that Savy Consumer as well as other online programs that Reward you with CashBack or Affilate programs or Exclusive Buyers clubs… These people understand the price discrepancies & are totally OK with it as long as they can save money in this economy.
I was upset about the term “Bottom feeders” but ya know Ignorance Is Bliss–As Long as My Friends & I can save some money to spend elsewhere we will enjoy getting More Bang for Our Buck–No matter the “Names” we’re called along the way. Just because Savy Consumers are Frugal it does not mean that they aren’t Loyal. We Are indeed very loyal we just understand the system better & make it work for us and others we share it with. Also Please understand as you may already know that when any item has pretty much the same price across the board incentives like Free Shipping or Email coupons certainly pulls alot of weight with consumers. Other than that Customer Service would be the next deciding factor.
Thank you for the story it is enlightening to see how some vendors & their industry thinks. ;)