In Store v Online Price

[A Party Shop]

We have a Bricks n' Mortar Party & Fancy Dress Shop that also has an online presence.

The trouble we have is that for a shop our prices are good and very competitive but when you compare us to an online only retailer they are too expensive/uncompetitive.

Example: http://www.apartyshop.co.uk/acatalog/Victorian-Poor-Boy-Costume-EB_4036.html

One of our thoughts is to have an Online and In Store price. I've used the RRP and Our Price feature in the above example to highlight this.

In store £14.99 and online (to make us the cheapest) £11.49

Big concern is that in store customers would be very annoyed (and rightly so) should they see a cheaper online price than the price available in store.

But how to we compete online?
Any thoughts or opinion on what we should do?

 

[emmylou74]

I think people could get very angry about you charging more in the shop than online. Why not have a website that is not connected to your brick and mortar shop?

 

[A Party Shop]

I must state that we do not charge more in store i'm simply trying to work out the best way to compete online.

@emmylou74
That's the thought we had but starting online from scratch in what is now a hugely competitive market does not fill me with joy!

 

[deniser]

Our prices are the same for both.

I am not interested in competing on price. I sell at the price I think offers me a good margin and if that isn't the cheapest, then tough, I hope people come to us for other reasons than just price.

But if something is obviously not selling on price though then I won't stock it and will look for an alternative. But I am guessing that the fancy dress market is a bit limited. It seems to be very very competitive.

 

[A Party Shop]

It seems to be very very competitive.

Very!

I like your way of thinking Denise

 

[ablative]

On the other hand, I would expect to pay less online. If I paid the same as in a bricks and mortar shop I'd feel I was being ripped off. The profits from my online purchase were going to pay for your bricks and mortar overheads.

 

[Trisha&ChrisPlant]

Very!

I like your way of thinking Denise

Yes, I do as well!

 

[John_Orcus]

The answer is to have a 'white label' website as well eg one which does not have your shop branding. You sell for whatever price you like on here and you won't annoy your bricks and mortar customers who look at your 'official' website.

Big names on the high street have been doing this for years. For instance an electrical retailer's in store price for a TV may be £200, but they are losing sales to an etailer at £190. Sell them for £190 on their white label site and they keep the sale, albeit with a reduced margin.

 

[Hunnie]

Hello,
We looked at online but also couldn't compete with others already selling online only at cheaper prices., so we only have a token online shop.
You could leave your prices the same but offer free delivery?

A completely unrelated name, as suggested, would give you freedom to reduce your prices.

I won't obviously charge less online as that could upset your regular customers.

The main stores -Tesco, M&S etc charge the same in store and online I think.

Regards,
Hunnie

 

[A Party Shop]

The only problem I can see would be getting the 'new' site ranking in search engines in this competitive market as it would be starting from scratch whereas the current site has been online since 2001

I like the free delivery idea.
A few problems as we have many products under £5 so we'd lose money on the sale.

 

[deniser]

On the other hand, I would expect to pay less online. If I paid the same as in a bricks and mortar shop I'd feel I was being ripped off. The profits from my online purchase were going to pay for your bricks and mortar overheads.

But that's a nonsense I say sitting here from my expensive commercial premises from which I run my online store....

Only bedroom sellers have no overheads and would you really want to buy from them?

 

[John_Orcus]

The only problem I can see would be getting the 'new' site ranking in search engines in this competitive market as it would be starting from scratch whereas the current site has been online since 2001
quote]

If you seriously intend to make money from selling online then it's worth starting a white label site now in order to get up the rankings.

If you don't, you'll still be in the same position in six months, a year etc, having lost sales to competitors.

 

[Montclair1977]

I believe this is simply the nature of the beast..

You must sell for less online as technically its a cheaper channel to sell from as you dont pay as much "rent" for your website as you do for a shop so you can afford a lower margin on the website than your shop.

If a customer complains simply explain this, and factor in delivery cost and the fact in a shop, the customer can physically have the goods at the point of payment and not have to wait for delivery.

 

[PrestonLad]

Certainly free delivery (on all baskets over 10 pounds) is a good way to go. Personally, being an infrequent (but recent) purchaser from a shop such as yours, I did favour on-line stores that had a physical shop. And a couple of pounds on a 25 pound item would not sway me.

If I was you, I'd do the following...

• keep your on-line purchase the same in store and on-line (with the free delivery)
• If you genuinely believe that you'd get insufficient online sales, then consider creating a second 'white label' ecommerce shop. It would be more work... and only you can decide if it's too much work, but it could be good compromise between other solutions that have been suggested.

 

[Baz Watkins]

Online prices are generally going up, there are very few bargains anymore, well with the exception of loss leaders. If I was you i'd match your prices equally but offer free online postage.

The second option is to not target price but target quality, stock availability, speed of delivery etc...basically the 'we go the extra mile' scenario.

If you work in retail you know the value of good customer service, so why not expand that to your online venture.

 

[oldoakey]

I would keep your prices the same across both shop and online but then give away some margin online with vouchers/offers/promotions etc. giving say a discount against an amount spent. Stating that these can only be used online - not in store.

 

[justbought.it]

We have a Bricks n' Mortar Party & Fancy Dress Shop that also has an online presence.

The trouble we have is that for a shop our prices are good and very competitive but when you compare us to an online only retailer they are too expensive/uncompetitive.

Example: http://www.apartyshop.co.uk/acatalog/Victorian-Poor-Boy-Costume-EB_4036.html

One of our thoughts is to have an Online and In Store price. I've used the RRP and Our Price feature in the above example to highlight this.

In store £14.99 and online (to make us the cheapest) £11.49

Big concern is that in store customers would be very annoyed (and rightly so) should they see a cheaper online price than the price available in store.

But how to we compete online?
Any thoughts or opinion on what we should do?

If you offer added-value online such as click-and-collect, same day delivery (http://www.shutl.co.uk) and 24hr collect (http://www.bybox.com) then price is no longer the only factor.

Also, try analysing customer behaviour in-store. Have a look through your CCTV and see if shoppers look on their phones when holding or looking at products. If so, your shoppers are likely showrooming. Try opening your WiFi and monitor the traffic (you can use http://www.opendns.com to do that). If people are visiting competitor sites or using Google shopping then you can address the problem accordingly. If you own an iPad or tablet then try an approach shoppers when they're using their phone in-hand ask them if they would like to view some more info about the product online using the tablet. Show them product demo videos on YouTube, reviews, tweets - whatever you can to close the deal there and then. Sometimes it's not about price but access to information.

You may wish to consider going to the InternetRetailing Expo in March, showrooming is being covered by yours truly: http://www.internetretailingexpo.com/solomo/

I hope that helps.

Glen.

 

[Talay]

... The main stores -Tesco, M&S etc charge the same in store and online I think....

The supermarkets don't even charge the same price in all their stores nevermind online.

 

[kelvin1950]

The supermarkets don't even charge the same price in all their stores nevermind online.

Many traders charge different prices depending where you buy. I was looking for a counterfeit note detector lamp yesterday. Same company, £89.99 inc vat + £4.99 postage on ebay, £89.99 inc vat + £4.59 postage on Amazon, £89.99 EX vat + £4.99 postage on their own website. Ludicrous!

 

[silvermusic]

With my customer hat on, I don't care which platform costs you more, why should I pay a different price because I want to use one method over another? The only exception would be paying a bit extra to have it delivered rather than being collected.

To my mind people are micro managing their margins and looking at the costs of each item sold through different platforms. Perhaps looking at the overall picture of being profitable and not worrying too much on each specific platform is a better method. If one is a bad performer and costing too much, dump it.

 

[sarahjohs]

Our prices are the same for both.

I am not interested in competing on price. I sell at the price I think offers me a good margin and if that isn't the cheapest, then tough, I hope people come to us for other reasons than just price.

But if something is obviously not selling on price though then I won't stock it and will look for an alternative. But I am guessing that the fancy dress market is a bit limited. It seems to be very very competitive.

This is ideal.

 

[serendipitybusiness]

I am in the same space as you and don't compete on price I compete on quality of customer service, quality of product and descriptions (as we know all three are lacking with a lot of lines and vendors). We both know there are sellers out there selling for tiny margins on some lines just to run the turnover, however quality of product and customer service is often poor as it is not worth it to them to care about the customer for such low margins, they stack em in and pile them high.

If we compete on price in this market we are dead, there are just too many people in this space. I know exactly why people come to me, they tell me, 'I saw it - sometimes cheaper - somewhere else but I liked your shop better' (and yes before anyone questions this I am telling the truth and this is a regular comment on customer service calls), or I used x last time but they are not in business anymore so I have come to you.

If I competed on price I would be a lot busier admittedly, however I would rather make less overall but each sale is actually worth my while offering a great service and I am able to satisfy problems without it affecting my bottom line dramatically. It allows me to concentrate the extra time on my other businesses, or improving that one rather than processing hundreds of orders for pennies.

We are in a market where people do want to visit a brick and morter shop, I often get phone calls asking if we have a shop they can visit as they have left it to the last minute or been told they need a costume by Monday morning on Thursday evening by the school!!

This is your unique selling point, you have a brick and mortor business that they can collect instore, firstly this inspires confidence. The market is certainly still afraid to some extent of buying online, if items have gone missing in the past I have had customers going mad at me as they are afraid that I have taken their money and not sent the product, when they are assured that I am a real business and care about their order they relax.
So you have the market that is afraid of buying online.

Also in this particular sector people are buying for an event generally so time is a definite factor, as you will be up on your local search, you will be bringing footfall to your shop from your website anyway.

I would concentrate on what you have and promote this as a major USP and keep prices the same across the board, people have a reason to shop with you, especially in this sector and the extra cost is worth avoiding the headaches for many.

Hope this helps xx

 

[mankman2012]

I know what some people ahve done is have the online presence seperate to the retail store.

 

[andyjt]

Depending on How Much Income your Online Shop brings in Compared to your B&M Shop I would use your Online Shop as an Extension to your physical shop.

Use it as a way to extend your Brand, Not every Customer Shops with your because your the cheapest, it may be because their confident in using you, or knowing you are a real shop as well as online.

The other way around this would be to match your prices online and offline and simply offer a Discount Code for Online purchases to keep your online prices reasonable?

 

[matilda duck]

With my customer hat on, I don't care which platform costs you more, why should I pay a different price because I want to use one method over another? The only exception would be paying a bit extra to have it delivered rather than being collected.

I'm confused by this. Why shouldn't you pay extra to have something delivered. Of you can't be bothered to pick it up physically then you should pay extra!

My advice is and I am a fellow shop owner. If your customers are happy paying the bit extra because of your service you give to them, then sell that fact on your website. Testimonials look good on a site and why shouldn't you sell yourself.

 

[silvermusic]

I'm confused by this. Why shouldn't you pay extra to have something delivered. Of you can't be bothered to pick it up physically then you should pay extra!

My advice is and I am a fellow shop owner. If your customers are happy paying the bit extra because of your service you give to them, then sell that fact on your website. Testimonials look good on a site and why shouldn't you sell yourself.

Your reply is nonsense and makes no sense. I'm quite happy to pay a delivery charge. What I object to is paying a different price online from that charged in a shop of the same company/business, same product, so it should be the same price.

 

[Garage Runners]

I would agree with the alias online.

In the store I would have the mentality of if they have come into the store then they want it now, if price was an issue then they would be online