Trends Report

Higher Prices In Your Stores: OK Or Not?

How Consumers React When Store And Web Prices For An Item Differ

March 30th, 2010
Sucharita Kodali, VP, Principal Analyst
Sucharita Kodali VP, Principal Analyst
With contributors:
Patti Freeman Evans , Kate van Geldern , Brendan McGowan

Summary

Shoppers have a world of information available to them when researching and purchasing products online. Armed with price comparisons and product knowledge, wise consumers search for the best deals they can get. This behavior, of course, poses a problem for multichannel companies that must adhere to manufacturer minimum advertised prices (MAPs) and would like to offer lower prices in their Web channel in order to be more competitive with eCommerce pure plays. Companies with strong competition online have no choice but to compete on price to some degree, in spite of inconsistencies with their store prices, unless they want to lose market share. That said, clever multichannel retailers will figure out ways to drive incremental business by creating better site experiences, by exhibiting transparency whenever there is a price difference, and by honoring price matches.

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