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Why Walmart.com Needn’t Care About Improving Prices

January 2nd, 2013

Apple has so aggressively positioned itself as a quality must-have product that price cuts not only might not help but could actually undermine the company’s quality pricing strategy. (“Who wants an $80 iPhone? Must be a really low-end version. I deserve a $500 phone. Maybe a high-end Android is worth looking at.”)

The company was also referenced as one of the sites that had the largest decline since 2005, a three-point hit. The problem with the fruit-named phone and computer maker? As it sharply increased the number and variations of its products, Apple’s site went from logical and easy to follow to confusing. (It named one of its iPads “the new iPad.” Really?) Product naming and a site not designed to make it easy to differentiate products and choose the intended one caused the drop in satisfaction.

“Apple’s dropping; it makes all the sense in the world,” Freed said. “They expanded their product choice,” and it became confusing to pick a specific desired model online.

Another area the ForeSee report focused on was site content, which is defined as “perceptions of accuracy, quality and freshness of information.” It was seen as an area of meaningful improvement for nine sites: Dell, Efollett, Football Fanatics, Gap, PC Connection, PC Mall, Shop, Tiger Direct and Toys”R”Us.

Like so much else in E-Commerce, the logical rational approach can be at odds with marketing. The rational content approach is that shoppers want to know as much as possible about a product. “People want to understand the sizing, what the material is,” Freed said. But in apparel, for example, such details can undermine the sale psychology.

Detailing the fabric, the stitching technique used and the number of buttons reinforces the fact that the product is just a shirt, whereas marketing wants to portray it in emotional terms: It’s happiness, power and sex appeal for a mere $49.95. Describing—borrowing from the Ann Taylor site—shirts as Alpine Apple, Lemon Fizz or Inkwell Blue won’t hurt. But the more the site speaks of cotton versus polyester, the more the psychological magic is broken. (And don’t even get me started on describing the working conditions of the factory used to make the shirt.)

“That’s the fashion designer’s view: It’s emotion. It’s an image,” Freed said. In short, having insufficient content details might not be an error as much as a strategy.

The most common area for meaningful improvement in the ForeSee report was merchandise selections. It recommended merchandise improvements for 65 sites, including Amazon, Ann Taylor, Best Buy, Barnes & Noble, Footlocker, Gap, JCPenney, Kohls, L.L. Bean, Neiman Marcus, Nordstrom, Office Max, Saks Fifth Avenue, Sears, Target, Walgreens, Walmart and Williams-Sonoma.

The next most common suggested area for improvement was site functionality, which was recommended for 28 sites, including Abercrombie, Apple, Costco, Crate and Barrel, CVS, Home Depot, Lowes, Macys, REI and Staples.


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Why Did Gonzales Hackers Like European Cards So Much Better?

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