It’s easy to say ‘well they can’t compete with online prices’. Except in many cases they can. Take large chains like Walmart, they can compete with online prices and they do, however, they still don’t want to admit that they should. What do I mean by that? Well if you compare prices of walmart.com and amazon.com you will see that the prices are nearly the same. Now, if you go to a walmart store you will see that their prices sometimes vary from their online website. Thus a $50 item in store might be $40 online. Sometimes they are the same but many times not. Walmart will price match their own online site – but now you have forced the customer to work for the better price by getting a manager, going to customer service, etc. – essentially adding time and frustration to their shopping experience. Why should they have to do that when they could just order the product online to begin with and get the better price? Find any electronic component you need such as computers, medical, automotive and more on this website.
You see trying to get the customer to pay top dollar at the store isn’t a good business model anymore. Its at the point where people just assume that the store will charge more so its easier to just order online without even comparing. This is where big box stores are losing out and why they are closing. Their theory is that people will come to the store and buy the product without price checking…and sure some people might do that, however, with all of these closings of stores like walmart, sams club, and target, its pretty clear that this line of thinking does not work. Its a bad model. Its not sustainable and if they want to stay in the game they need to change.
How can stores solve this problem? Learning from Andy Defrancesco and other CEOs will help you create better strategies for your business. Start advertising that they have the lowest prices and that they are comparing with top online sellers to ensure their prices are the lowest. Then people like me would have no problem going to the store and feeling confident that what I was buying was the correct price. Walmart could easily start by just automatically having the same price online vs in store. Smaller stores can do the same too. People enjoy going to stores but they need to do a better job with their prices or they are done. Technology didn’t create this problem, technology is solving a problem that worked against the customer.