When I was stocking up on baby gear, awaiting the arrival of my daughter, I was comparing prices online one day for a set of baby bottles and found them at a great sale price. The retailer that had them listed on sale on their website also happened to have a brick-and-mortar location at the mall a few minutes from my home, so instead of ordering online and waiting a few days for my purchase to arrive, I decided to hop into the car and head over to buy them the same day. When I arrived at the store, the item I wanted was in stock, but to my disappointment, it was listed at full price.
Thinking that perhaps the store had forgotten to put up the sale sign, I grabbed a box and brought it to the service counter for a price check. It rang up at full price. At that point, I pulled out my phone to show the clerk that the item was listed for much lower on the store’s own website, but the clerk replied that their policy was to not match their online price. Funny enough, I was able to place an “online order” for the item in the store and have it shipped to the same store, several days later. The item I wanted was in stock, but in order to pay the lower price, the retailer actually shipped another box to the same store, and my heavily pregnant self was obliged to wait a few days and make another trip to the mall to finally get the baby bottles at the price I wanted to pay. This surely cost the retailer much more in shipping and handling, and unquestionably caused more customer frustration, than just honoring their online price in store.
This anecdote is only one example of the customer’s perception of different pricing strategies online and in store. Funny enough, now that my daughter is a toddler, we often make trips together to the local bookstore. I usually pick up a few books for her whenever we visit, knowing full well that I’m paying more in store than I would if I ordered them from the retailer’s own website, or from Amazon. Somehow, this awareness doesn’t seem to stop me from buying the books in the moment. This goes to show that omni-channel pricing strategies are not one-size-fits all.
There are a few elements omni-channel retailers can consider when deciding how to approach pricing online and in stores:
- What is the competitive landscape? What are your competitors doing? Is there something else you provide that brings extra value, like additional services (ex. free pant hemming, extended return policy)?
- What kind of products are you selling? Is the product something customers are likely to purchase on impulse? If so, there’s a greater likelihood that they will pay more in store, as many won’t even take the time to shop around. Is it rare? We’ve all seen products that flew off the shelves, like the Hachimals craze last Christmas. Customers were so excited to get their hands on one that many were willing to pay a premium.
- Are you equipped to manage products, prices, and promotions efficiently across multiple channels? Are your e-commerce solution and your merchandising system integrated? Are you stuck updating the same item in multiple places, or do you have the technology landscape needed to manage omni-channel experiences without the risk of errors and lost productivity due to duplicate manual processes>
- If you decide to price differently for different channels, how will you address customer price match requests? If a customer asks a physical store to honor the online price, will you match it on a per request basis?
Perhaps the most important consideration of all is what kind of omni-channel customer experience you want to aim to deliver. Today’s customers are savvy and incredibly informed. They demand easy, seamless shopping experiences across all channels, and that often extends to pricing and promotions. Ultimately, the customers will vote with their wallets and tell you what they’re willing to pay.
