How web price visibility may set up conflicts with store prices
The Internet is making it easier than ever for shoppers to find the lowest price available on that plasma TV or camcorder. The visibility to all online shoppers of lowest price on a product also is setting up a challenge for some multi-channel retailers in reconciling their own web sites prices with those in their stores, AMR Research Inc. retail industry research director Rob Garf tells Internet Retailer.
“The online channel is conflicting to a certain degree with retailers’ strategies on zoned and regionalized pricing,” says Garf. “You have these two strategies butting heads in terms of a retailer’s desire to not only allocate specific products to specific areas of the country, but also to price them differently, versus making all products available to everybody over the Internet.”
While the retailer’s objective is to squeeze as much margin out of a product sale as possible, the Internet and the one price it shows to all customers make it more difficult for multi-channel retailers to have a standard price across all channels, Garf says. To address the issue, retail best practice is currently moving in two directions: retailers should either give store managers clear directions to honor a lower Internet price when in-store customers cite one off the retailer’s own site; or be “blatantly obvious” about communicating their pricing policy, he adds
“In some cases, retailers will say this is the Internet-only price or this is the store-only price. That way, at least they are setting the expectation of the consumer that it’s a specific price,” he says.
Garf adds that in the future, more retailers may take yet another approach to reconciling prices across channels by attaching pricing differences to an individual consumer’s purchase history with the retailer, rather than to the sales channel in which the purchase happens to be made, in a build on current retailer loyalty programs.
Garf will speak in a session entitled Making E-Retailing Music: When IT and Marketing Harmonize, at the Internet Retailer Conference & Exhibition, June 4-7 in San Jose.
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