Tag Archives: competitiveness

Showing competitors’ prices on your own site – PROs and CONs

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Showing competitor prices on your own site

Are you aiming for the lowest price in the market? Want to share it with your customers and provide them with a clear proof of it? Thinking of showing your competitors’ prices on your own website?

Not convinced that it’s a good idea?

One might presume that consumers would be all in favour of this. And that would be almost completely right. A study by the e-tailing group Internet Retailer on consumer comparison shopping shows the following figures:

  • 63% of consumers say they would like to see competitors’ prices on a retailer’s site
  • 78% would likely return to a site that shows competitors’ prices
  • 36% would be “much more loyal” to a retailer who displays price comparison

PROs:

Time-saving – It does save time and definitely makes it easier for shoppers to compare and decide.  Though coined about two centuries ago, the phrase “Time is money” perfectly applies in modern times as well. For that reason, it is more than likely that potential shoppers will come back to a site showing competitors’ prices when they want to compare prices by just one click.

Money-saving   is most likely the deciding factor for those in favour of showing competitors’ prices.  Savings that could be made using this feature are significant, and given the current economic crisis, those who shop around and compare prices before buying would be thankful to get a chance to do it without spending too much time on it.

Trust is what every retailer strives to build and grow in customers.  Showing competitors’ prices on a site – not only higher prices, but lower as well – would be an excellent means to achieve this end.  The fact that a retailer is open to showing competitors’ prices, both higher and lower particularly increases trust in the eyes of consumers.

Lowest price guarantee, should be a benefit both for a customer and a retailer. The customer gets a bargain, the retailer gets a customer. In other words, if a customer finds a lower price (including all duties, taxes, fees and shipping costs) a retailer guarantees that they will at least match that price, depending on the rules and conditions of the offer.  Lowest price guarantee and showing competitors’ prices feature would appear a natural combination.

CONs:

Showing competitors’ prices might help customers decide where to shop. It is their decision to make and they get what they choose. However, by showing competitors’ prices, retailers might get what they neither choose nor want.

Take a risk of lawsuit as an example.  Unless you monitor and update your competitors’ prices regularly, you might end up being sued.  You might also find yourself in threat of a lawsuit even if you do keep competitors’ prices on your website updated. On what grounds? Featuring someone’s logo on your site might be construed as infringing their registered trademark.

Advertising the competition.  Positive or negative, it is still an advertisement. Your lower prices might say that you are a better choice for a customer, still, your mentioning a competitor might lead the customer straight in the unwanted direction– to your competitor’s site. A potential client might leave your site to compare your prices with those of a competitor, and never come back.

A number of merchants might see this as unprofessional.  In their opinion, competing just on price is not the sole point of e-tailing (or any other) business. Your offer should include a high standard of service and quality regarding delivery, call centre/customer support. In other words, do not compete by pointing out that you are the cheapest. The lowest price is overrated. Attract customers by beating your competitors in every other respect, not just the lowest prices.

 

Showing competitors’ prices on your own site – yes or no? The answer to this question lies in every retailer themselves. And this answer varies from retailer to retailer. Based on the items they sell, the service they provide, the consumers they target and other special or general requirements, retailers weigh the pros and cons of using this feature and they decide.

As for those who find it convenient to use this feature and want to have competitors’ prices displayed on their website, Price2Spy API is just the solution they need.

Price competitiveness – a quick global summary

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Price competitveness around the world

Since Price2Spy clients come from virtually all parts of the world, we have gathered some comparative data which can help analyze competitiveness of online stores worldwide.

1) US & Canada – US data can be somewhat misleading since big US stores are actually big global names, so their pricing applies not only to the US, but to the rest of the world as well. Anyway, this is the region with the highest price awareness rate, with many retailers operating under the ‘Best price guarantee’ policy. Whole clusters of competitors are closely monitoring each other – with the end buyer making the most of this price race. The fact that Google Shopping comparison works very well with most such websites makes the competitive edge even more sharp for the retailers.

2) Western Europe + Australia – it’s pretty similar in Australia, UK, France, Germany and Benelux, apart from the fact that those markets are in most cases oriented to their local customers (or at least customers speaking the same language). One should also take into account that big marketplaces like Amazon, Ebay etc. have their local websites in most of these countries, making the race extremely competitive. However, we have noticed that retailers from non-English speaking countries are much more reluctant to make use of automated tools for tracking their competitors.

3) Southern Europe – it’s a bit more relaxed there (does it have something to do with the lifestyle? :-) ) Anyway, it’s a known fact that customers in Mediterranean countries like to speak to a sales representative (human being) before making the purchase. This makes the price race a bit less tight, with more emphasis on other sales skills (talk talk talk, web design, etc.).

4) Far East – English speaking regions of the Far East (Hong Kong, Singapore) are highly technologically developed and thus very price-savvy. With very very tight pricing race there, every single cent matters.

5) China, Korea, Japan – to be honest, the language barrier is too big for me there, so I don’t really have that many details. Anyone who could help?

6) Brazil and Latin America – Brazil is by all means the technological leader of this part of the world, in all aspects, and we are encountering a high increase in the number of Brazilian stores competing with each other / monitoring each others’ prices. However, the price race is not that intense as in the US / Western Europe yet. On the other hand, Latin America is lagging behind, not that competitive at all (except for Mexico).

7) India – huge market, with some of the world’s biggest IT stores, still discovering online competitiveness. Lots of evangelical work to be done there yet.

8) Africa and Arab world – with the exception of South Africa and somewhat Egypt, there is not that much competition after all – and the ones who do compete, do it the old-fashioned, manual way.

9) Eastern Europe and Russia – the bigger the market (Russia, Poland, Turkey), the tighter the competitive edge. Particularly in Russia, whose population is getting more and more aware of price comparison sites. In smaller countries, traditional ways of following competitors are more popular, especially for the fact that online retailers in Eastern Europe usually find prices of automated price monitoring tools too expensive.

So the general conclusion is – the more technologically advanced the population is – the more competitive retailers have to get. The bigger the market, the bigger the business for online comparison sites is, making it easier for the end consumer to find a better deal. It’s very interesting to see how this situation will evolve over time.

Please let us know if this summary was of any help to your online business.
Of course, we would like to encourage eCommerce professionals from different parts of the world to have their say on their local markets – it would be much appreciated.