Should Old Navy and others offer better deals online than in stores?
Customers still spend the most in physical stores, so why is Old Navy offering lower prices online than in their brick and mortars? In a recent mall visit to Old Navy, retail anthropologist and half of the Kizer & Bender speaking duo, Georganne Bender, found that the retailer was selling the full-price pajamas that she was about to buy in-store for 35 percent off online.
“Old Navy has a Buy Online Pickup In-Store (BOPIS) program,” Ms. Bender wrote on Kizer & Bender’s Facebook page. “So technically we could have stood at the checkout, ordered pajamas online and stood there while an associate pulled them and brought them to the counter.”
In Ms. Bender’s case, the store associate allowed her to purchase the pajamas at the discounted price without all of the BOPIS rigmarole, but Old Navy isn’t the only retail store where smartphone-savvy customers quickly realize they’re paying more for the in-store experience.
When shopping for her daughter’s Halloween costume, Forbes writer, Dina Gerdeman, found that the price offered online was $10 cheaper than the in-store cost:
“I asked the cashier if she would honor the online price in-store; she politely declined, saying the store didn’t match discounts found on its website. But she did offer to let me order the costume on the store’s computer and get free shipping.”
Although it may seem counterintuitive for physical stores to direct customer traffic online, retailers do pay a lot of extra overhead on their physical stores — from rent costs, to associate salaries, to the price of keeping the heat on. So, it’s easy to see why Old Navy charged more for products sold in-store. It’s also important to note that Old Navy was willing to match its online prices when the difference was brought to an associate’s attention, while many other retailers such as Bloomingdales, Home Depot, and Macy’s have firm policies against matching online prices in physical stores.
When a retailer prices their products differently online than in-store, it forces customers to view that brand’s digital and physical experience as two separate entities, undermining the omnichannel shopping experience that modern consumers have come to expect.
The latest shopper behavioral data still points to the fact that omnichannel shoppers offer up the highest value proposition. A recent study published in Racked found that online shoppers spend 64 percent more when they have first visited a physical store location. “So rather than pitting online shopping against in-person shopping,” Racked says, “the researchers suggest that brick-and-mortar stores make use of digital technology to enhance the customer experience.”
Yet, what’s going to bring customers into a store like Old Navy in the first place, when they know they can get a better deal (with none of the hassle) online?
- Should Retailers Match Their Own Prices Online and In-Stores – Forbes
- Kizer & Bender – Facebook
- Don’t Blame the Retail Apocalypse on Online Shopping Just Yet – Racked
DISCUSSION QUESTIONS: Is it important for retailers to offer customers a consistent pricing across online and offline channels? Do pricing disparities like Old Navy’s discourage customers from visiting physical stores?