3 Myths (and Truths) About Online Pricing Expectations
With tightened budgets and increasing online tenure, consumers are smart about the way they shop across channels today.
Comparison shopping engines and widgets, for example, make it easy for consumers to quickly find the cheapest price for an item. This access has accustomed shoppers to finding the best deals or values available online — and the majority of online buyers select the item with the lowest price, regardless of channel.
This easy access creates a conundrum for retailers, who must manage consumer expectations around pricing, but who also want to be consistent in their business practices.
Forrester Research, in a recently published report titled "Higher Prices In Your Stores: OK Or Not? How Consumers React When Store And Web Prices For An Item Differ," examined this issue and revealed five retailer myths surrounding the topic of consistent pricing across channels. They include the following:
Myth No. 1: Prices must be consistent across channels.
Truth No. 1: Consumers seem to understand the logic behind price variances and hardly bat an eye, according to the report. In fact, even though they notice price differences between channels, 60 percent of U.S. online buyers said in a Forrester Research preholiday online retail survey in the third quarter of 2009 that they just buy in the least expensive channel.
Myth No. 2: Lower web prices will lead to a price-matching nightmare.
Truth No. 2: While there are costs associated with price matching, the report pointed out, the benefits are that retailers can effectively compete in a growing channel and maintain that competitiveness with an extremely valuable consumer. In fact, the population segment that's most likely to use comparison shopping engines has household incomes 54 percent higher than the segment least likely to use them.
Myth No. 3: Different prices in different channels are terrible for my brand.
Truth No. 3: Just one in 10 U.S. web buyers surveyed said they lose trust in a retailer when they discovered that the product they intended to purchase had a different price online than in-store, the report said. That said, the report suggested that clarity around differences in pricing, and clear policies and instructions on how shoppers can address those differences, can help work around the discrepencies. Wal-Mart, for example, displays a secondary price line in addition to the web price to show if the product price is different if bought in brick-and-mortar stores, the report noted.