Retailers and manufacturers have trained shoppers to be savvy. Connected Consumers know that by scrutinizing prices while shopping they might find the same item at different costs across retailers. In some cases, they can find the same retailer has a product for sale at different prices online and in-store. There are even some instances of dynamic pricing, where identical products are found to be sold to different consumers at different prices by the same retailer. In an era of uber-transparency, what is the role of price in the future?
One product, one price
Shoppers are increasingly baffled by the idea that they should pay a different amount for the same item at a different place. 58% of all shoppers in our FutureBuy survey said: “It is important to me that the price of an item is the same whether I buy it online or in-store.” The proportion of Leading Edge Consumers who agree is even higher at 70%. Consumers expect prices to be transparent and, we predict, simply won't accept paying a different amount for the same item depending on where it is bought in the future.
Upsell, price-match or trade down
In the future, you must offer more to charge a price premium at retail. We think of it as a first floor, ground floor and basement pricing model. On the first floor, retailers upsell, offering better service – for example, longer warranties, unique private label ranges, or complementary services such as coffee shops. On the ground floor, items are price-matched. At basement level, the discounters trade down with their own private label. Discounters in grocery do this very successfully because their offer is simple and transparent: they offer a similar product that is good enough at a lower price, not the same product.
The idea that equivalent items should be priced exactly the same regardless of circumstances in the future seems radical and doomsday – a nightmare race to the bottom. But is that really the case? We think not. Price checking costs shoppers time, and the shopper who takes longer to decide spends less, and sometimes spends nothing at all. Retailers and manufacturers need to think “one product, one price”. Price matching can free the shopper to concentrate on choosing and buying products and services, rather than waiting for the best deal.