In my previous article ‘The rise of the tech-savvy employee’, I looked at what impact multichannel retail is having on shop floor employees, including the challenges that they face when dealing with new technologies, whether customer service has changed as a result, and how their role is expected to develop in the future. This month, I would like to discuss price comparison – our need to hunt for the best bargain, those companies that cater to those needs, and the impact it has on retail in general.
It’s probably safe to assume we are naturally predisposed to look out for a good deal - even when financially comfortable the satisfaction of returning home with a bargain in hand is hard to beat. We get great pleasure in regaling friends in tales of our shopping prowess. This desire to track down the lowest price possible has been further accelerated by the current economic climate – shoppers who have been forced to tighten their belts in recent years compares prices not just for fun, but also because of necessity.
This growing trend in shopping behaviour has been helped significantly by the rapidly evolving consumer technology landscape – we don’t need to walk from shop to shop, we can do it from the comfort of our own home. As a result of the explosion of smartphones and tablet devices, we can even compare prices while we’re on the move, sat on the bus or eating our lunch in a cafe.
We also have dedicated websites to help us hunt out the best bargain. In fact, around 10 million people use price comparison websites each year in the UK. They’re quick, convenient, and most importantly, offer great deals on a whole host of products, from fashion and electronic goods, to financial services and car insurance. By simply entering a few details, comparison sites provide a wealth of information, listing products from different retailers or providers depending on your needs. The comparison shopping facilitated by sites such as Kelkoo.co.uk, Pricerunner.co.uk, StyleCompare.co.uk, and Comparethemarket.com, offers obvious benefits to consumers who can find the best deal on the product most ideally suited to their needs.
Mysupermarket.com has taken the process one step further by allowing users to compare the price of their virtual or physical in-store shopping basket with a number of other major retailers, including Boots, Superdrug, Majestic, Sainsbury’s and Asda. This is a great service that ensures customers can get the best price for their shopping. However, as consumers can do this, retailers should embrace the capability and guarantee to meet the lowest basket price there and then in store; not only will it secure the deal and keep the market share, but it will also avoid the race to the bottom of line-by-line product commoditisation.
So comparison sites can clearly benefit both the shopper and the retailer. But this desire to compare everything we buy might not be completely positive. A study by Dunn, Gilbert and Wilson, published last year in the Journal of Consumer Psychology, titled: “If money doesn’t make you happy, then you probably aren’t spending it right”, suggests that comparison shopping may sometimes come at a cost.
By altering the psychological context in which purchasing decisions are made, “comparison shopping may distract consumers from attributes of a product that will be important for their happiness, focussing their attention instead on attributes that distinguish the available options”. In other words, the process of comparison shopping may focus consumers’ attention on irrelevant attributes of a product to get the ‘best deal’, instead of a product that is best suited to their needs.
The authors also argue that the comparisons made when shopping are not the same comparisons made when consuming what was shopped for. One of the dangers of comparison shopping is that the options we don’t choose – so we can get the best deal – become less important as standards for comparison. Therefore, by choosing options to get the cheapest deal, we might focus too much on price instead of attributes in which we intended for it to be used. This is furthered by a recent study by Which? that found that insurance comparison sites use pre-selected answers and assumptions in their online forms to make quotes appear cheaper. This leads to ‘one size fits all’ policies that could be unsuitable for individual needs or even prove invalid in the event of a claim.
Despite these concerns, research by ComersumerIntelligence.com found that the possibility of missing out on a cheaper deal does not deter shoppers who simply want the convenience of price comparison sites to save them time and effort. The research found that a quarter of price comparison website users said they intend to increase their use of the sites in the next year.
This is all very interesting and poses some important questions. As comparison sites are largely dominated by online-only retailers, how can high-street retailers compete, and as technology advances, how can they keep up with their customer’s desire to compare?
As the physical stores continue to evolve to meet the demands of today’s tech-savvy shoppers – with kiosks, iPads and other devices revolutionising the in-store experience – retailers need to embrace the idea of comparison shopping to strengthen their multichannel offer.
One way to do this is to provide customers with product information and customer reviews both in-store and online via a virtual shopping system. By providing customers with more insight into what they are buying, brick and mortar retailers can position themselves as a go-to source of information on the high-street. This facility, coupled with superior customer service from in-store advisers, would encourage shoppers to compare goods, while ensuring that they choose the deal most suited to their needs.
Although online comparison sites, such as mysupermarket.com, remain a popular choice for consumers, the service does not provide the instant gratification that comes with traditional high-street shopping. No amount of convenience will ever replace the pleasure we get from physically walking into a shop and finding an unexpected gem, a great bargain or the personal touch that comes with choosing the perfect gift for a friend or loved one. High-street retailers must utilise their position supported by the right categories and propositions to interact, engage and form a close bond with customer’s in-store – comparison shopping (and basket price match) is one part of this process.
Chris Webster is Vice President, Head of Retail at consultancy & IT service firm Capgemini