Online Shopping: Price Tops Convenience?

Feb 25, 2002

Evidence now suggests that online shoppers are more concerned about price than
about new features or convenience – the advantage which e-tailers once thought
would allow them to charge more than offline stores, reports the London Financial
Times., one of the few global names in online retailing, has
made this discovery. Founder Jeff Bezos has committed the group to an “everyday
low pricing” model that would not look out of place at Wal-Mart. He has also
begun to tackle customers’ aversion to shipping charges by waiving these on
orders above $99.

Price pressures have been driven in part by the growth of established U.S.
discounters such as Wal-Mart and Target Online. Stephen DiMarco of Compete,
a Boston-based advisory company, notes that the growth in discounters’ traffic
was higher than at other online stores before Christmas. Comparison shopping
is also becoming an entrenched trend. “More customers are looking at one product
on two sites, then opting to buy on the cheaper site,” DiMarco says.

Moderator Comment: Are online consumers now more concerned
with price than convenience?

It stands to reason as more of the population migrates
online that pricing would become more important. Early consumer adopters of
the technology tended to be more educated and affluent. The general population,
dealing with a flat economy and uncertain employment prospects, make not see
higher prices as a fair trade for the convenience delivered. [George
Anderson – Moderator

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