April 22, 2014, 11:37 AM

Online stores win the low-price wars

For the first time since Anthem Marketing Solutions began comparing online and offline prices, items priced under $5 are now better deals online 66% of the time.

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Items priced under $5 are now better deals online, says Anthem Marketing.

Everyone’s looking for a deal. And for a long time, the place to look for a deal on items priced under $5 was in stores. But that’s changed, says Anthem Marketing Solutions, a consulting firm. In the most recent iteration of the firm’s semi-annual price comparison, Anthem found items priced under $5 had a lower price online 66% of the time. In a similar analysis in June 2013, 61% of these low-priced items were cheaper in stores.

The Anthem survey compares prices of identical products at stores and online retailers. The analysis examines products across a variety of categories—cosmetics, books, electronics, entertainment, home improvement, household items, personal care, and school and office supplies—as well as price tiers—$0-$5, $6-$20 and $100-plus. The prices compared in the study excluded taxes, shipping fees and coupons.

The analysis, completed in February, found that 70% of items compared had the same price online and offline. But for the 30% of items with a price difference, the better price was found online 65% of the time. However, when a price difference favored a store, the item was 32% less expensive in store than online. That trend was especially prevalent in the entertainment category. Although only 15% of items analyzed were less expensive in stores, the average savings on those items was 76%.

“Online is winning the price wars—they have forced brick-and-mortar retailers to move to price parity in many categories, and are gaining price advantage at all price tiers,” the report says. “Even so, it is still worth doing price comparisons for consumers because if they can find a better price, it is often substantial.”

The cosmetics and books categories had the highest percentage of deals online, with 91% and 80% of items selling for less online, respectively. Stores had the edge on e-retailers in the home improvement and general personal care categories with 66% and 69% of items having a lower price offline. Online captured the price advantage in all price tiers analyzed.

Online and in-store prices were compared for Wal-Mart, Target, Kmart, Office Max, Office Depot, Staples, Ace Hardware, Lowe’s, Home Depot, Best Buy, CVS and Walgreens. Online prices were checked for Amazon.com. Of the 12 stores analyzed, eight favored online pricing, two had price parity and two—Home Depot and Office Depot—had better pricing offline. Walgreens showed the biggest price differential, with 81% of items less expensive online.

Walmart.com is No. 4 in the Internet Retailer 2014 Top 500 Guide. Target Corp. is No. 18, OfficeMax Inc. is No. 12, Office Depot Inc. is No. 9, Staples Inc. is No. 3, Sears Holding Corp. is No. 5, Lowe’s Cos. Inc. is No. 36, The Home Depot Inc. is No. 16, Best Buy Co. Inc. is No. 15, CVS Caremark Corp. is No. 103, Walgreen Co. is No. 43, and Amazon.com is No. 1.

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