Retail stores and retail digital advertising may find a battle ensuing with the likes of online retailers like Amazon, eBay et. al. A recent survey done by Accenture and published by Marketing Charts indicates that price perceptions are skewed between online and in-store retailers, especially in the 20 to 40 age bracket. In fact 46% within that age demographic believe prices are higher while 23% feel prices are “about the same.” See accompanying chart:
In the United Kingdom, the perceptions are even more skewed with 59% believing in-store prices are higher. Smartphone and tablet users often use one store to view the item, price compare with online retailers and then eventually purchase the item elsewhere.
Accenture’s study shows that three-quarters of US smartphone and tablet owners who compare prices in-store do so every time they shop, while the remaining 26% do so only in cases of purchases over $250. Overall, 75% of the US respondents report using mobile devices to compare prices while in-store.
Consumers can be persuaded to purchase in-store, though, if the in-store description, price and availability are consistent. For example, if the online offering does not match the in-store offering in its description, 51% would purchase in-store. If the price did not match, 42% would buy in-store.
The perception of higher prices is obviously not just a perception. With thousands and even millions of comparisons going on daily within stores, consumers are becoming educated on what products cost. The knowledge price-gap between products is dwindling into oblivion, giving consumers more power and a greater perception that in-store prices are higher than those found online.
The shake-out and battle between the two will continue to be waged. My personal feeling is that online retail prices will probably become less competitive over time as things like local sales taxes and other costs of doing business not previously had by brick-and-mortar giants come into effect. But, I may be wrong, especially in the event that experiments like Amazon Fresh here in Seattle are able to become profitable, scalable and replicated across a broader audience.
This is also not good news for digital signage vendors who are banking on growth in brick-and-mortar retail to drive digital signage. Luckily, there are many other industries who’ll be needing signage, not just retail.