Online Vs. In-Store: Anthem Marketing Solutions Study Shows Divergence in Pricing

Share Article

Online/Offline price break changes over the course of several months.

As a follow-up to a 2010 study, Anthem Marketing Solutions found changing patterns in online and offline pricing: Items with prices below $15 were generally cheaper in store, and those priced above $15 were generally cheaper online. This reflects a clear divergence from the Fall 2010 study, which found that items below $50 were often cheaper in-store, where as those above $90 were more commonly priced lower online. Anthem’s most recent study still concluded that an item’s price tier, category, complexity and usage type actually better predicts which channel will have the lower price.

Items included in the study were selected to represent a typical basket of consumer household purchases, and to qualify, were required to be available in 3+ online and 3+ in-store retailers, in the same size, packaging, and model number, where applicable. Pricing was recorded across a total of sixteen online and offline retailers on a single day, independent of applicable taxes or shipping fees.

Understanding the forces driving consumer behavior is critical for optimizing channel pricing. By increasing the competitiveness of moderately priced goods, there are a variety of supply chain implications for the retailer, as well as the shipping companies, warehouses and manufacturers. In order to ensure profitability, more enticing and convenient shipping deals need to be enacted for these lower priced goods to compete with the immediacy of in-store purchases, and fewer items being delivered to physical stores could allow for re-allocation of profits to shipping companies, warehouses, and manufacturers. Physical stores may also see a benefit of increasing the online profitability of low-priced items, as fixed costs may be lessened due to a reduced need for store space as well as an increased focus on only stocking items that are most likely to be purchased in-store, such as convenience goods.

Additionally, changes in Amazon.com tax policies could affect the future implications of buying online. While many people look to online-only outlets to avoid paying sales tax, this practice could become difficult with changing state laws.

ABOUT ANTHEM MARKETING SOLUTIONS
Anthem Marketing Solutions is a strategic consultancy focused on helping clients acquire, retain and grow profitable customer relationships. For more information on this study, please visit http://www.anthemedge.com.

# # #

Share article on social media or email:

View article via:

Pdf Print

Contact Author

Hallie Borden
Anthem Marketing Solutions
(312) 441-0382
Email >
Visit website