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- For the most part, consumers who shop online versus brick-and-mortar stores do so. Because, it’s where they expect to find the lowest prices, right?
- Most shoppers do not cite “lower prices” as their primary motivation for shopping the web. According to a new survey of over 1,000 consumers by Simon-Kucher & Partners.
In turn, retailers that make winning the low-price war the centerpiece of their competitive strategy. Therefore, this coming holiday season and in general will regret that tack long term, the firm concludes.
- While it might sound unglamorous, retailers that invest in infrastructure will reap long-term customer loyalty, said Susan Lee, a partner who runs Simon-Kucher’s.
- Recent moves by the nation’s biggest brick-and-mortar retailer and the largest online retailer. Respectively, for guidance on one secret to satisfying online shoppers.
- Wal-Mart is building two new fulfillment centers to boost the speed of delivery. While Amazon is increasing its seasonal staff by 70,000 employees, according to a Simon-Kucher press release.
- “Wal-Mart’s competitive issue with big online retailers isn’t pricing. It’s a fulfillment and service battle,” Lee said in the release.
The big lesson: It’s a big no-no for retailers “to use pricing to correct a weakness in another area. Like product selection or speed of delivery,” she said. “You should fix the problem.” That’s not to say that price doesn’t matter to shoppers – but its importance varies by product category:
•“Lower prices” was the main reason. That brought “new frontier” items such as health and beauty products, toys/sports/hobby related merchandise, as well as clothing and furniture.
•However, when it came to buying food and beverages, shoppers surveyed ranked “better selection”. As the leading impetus driving their purchase, the survey said.
•And “free shipping” was the leading motivation among shoppers(16%) buying commodity products like cleaning and paper products.
“The vast majority of buyers in all segments did not cite lower prices as their main motivation,” by the press.
Lee elaborates on the findings in her new eBook, “It’s Time For E-Commerce To Grow Up.”