Price comparison
websites impact in-store behaviour, a Concordia study shows
Newswise, January 6, 2016 — The constant barrage of
post-holiday sales touted by web-based retailers may make it seem like online
shopping is killing real-world stores. But shoppers are actually engaging in
“web-to-store” shopping — buying offline after comparing prices online.
A study from Concordia University’s John Molson School of
Business shows this consumer behaviour has important implications for retailers.
When setting in-store prices or offering price-matching
guarantees, offline retailers should focus more on online retailer ratings than
on offering the lowest prices.
In a study published in the Journal of Retailing, one of the
top journals in the retailing field, marketing professor Onur Bodur
investigates how offline consumer behaviour is influenced by online price
comparison sites (PCSs).
His results from three studies show that consumers pay careful
attention to things like retailer ratings, how often a product is offered at
the same price, and differing price levels.
“Price comparison sites like Shopzilla and PriceGrabber are solid online information sources that display numerous retailer prices for a product type or given brand,” says Bodur, who co-authored the paper with colleagues Noreen Klein from Virginia Tech, and Neeraj Arora from the University of Wisconsin-Madison.
For the study, the research team focused on how information
from PCSs often acted as reference pricing for in-store shoppers.
“We asked: How PCS retailer ratings would impact in-store
price evaluations? Do consumers really believe super-low online prices are
obtainable?” Bodur says.
“The good news for brick-and-mortar retailers is that low
online prices may not be used by consumers as comparison prices. We found that
offline retailers should actually focus on prices that are associated with
highly rated online retailers. That’s because their prices are perceived as
more valid and therefore have greater impact on subsequent price evaluations,”
he says.
“When there is little variation in PCS retailer ratings,
offline retailers should also focus on prices that occur frequently in PCS
searches and not just the low price.”
