Mobile Commerce & Price Comparison Shopping
With the 2011 holiday season forever changed by the rise of mobile and couch commerce, retailers are searching for a way to compete with mobile price comparison shopping, often taking place in a brick and mortar location.
A recently released study on In-Store Mobile Commerce found that during the 2011 holiday shopping season, more than half of adult cell phone owners used their phone in store to help with purchasing decisions. With phone in hand, consumers were often looking for reviews or advice from friends. But 25% of adult cell phone users were looking up prices to see if they could get a better price elsewhere. Internet Retailer recently reported that bar code scanning was up 297% in 2011.
Retailers are worried about this new price transparency phenomenon. It’s got the attention of retailers like Target, who issued a letter to their suppliers, asking for suppliers’ help in matching rivals’ prices and for merchandise unique to Target. On the other hand, retail giant Amazon, is encouraging the price transparency market and in-store price comparisons.
What are all the other retailers to do?
(1) Knowing each product’s comprehensive online competitive landscape is critical to succeeding in this market. It’s not enough to say “I think these 5 sites are my top competitors, company to company.” Online retailers need to get really granular with each product in their product lines, and be able to find all online competitors for each one. Knowing this information means the difference between pricing yourself out of a sale, pricing too low and leaving money on the table, or pricing competitively – for each and every product, category and line of business.
(2) Rule out irrelevant competitors. If another retailer is selling the same product 40% lower than you, but gets only a fraction of the web traffic you get, you might consider ruling them out as irrelevant. But maybe the overlap in the products you both offer is greater than 40%? Being able to decipher competitors on pricing, popularity and product offerings offers greater intelligence to compete in a price transparent market.
(3) Put your best price forward. 58% of small and mid-size retailers see the opportunity to nudge gross margins up and improve top line sales through savvy pricing strategies. Understanding the weighted average price of only your most relevant competitors for each product is a powerful way to compete in this competitive price transparent market.
(4) Now that you know your pricing, don’t compete on price alone. Pricing competitively isn’t the only variable to success in a price transparent market. Many retailers are fighting back, leveraging customer relationships, offering freebies big sites can’t, and launching campaigns like “shop local” and “buy where you try.”
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