Forum Moderators: buckworks
The behaviour of online shoppers was also changing, he said."The single biggest reason people went online before this year was price," he said. "The number one reason now is convenience."
BBC News [news.bbc.co.uk]
Makes for a good read except for the typo about the 18-14 age bracket
Hmmm...convenience...like say...clicking on the first couple listings in the SE's, and buying at the first place that provides good information and makes it easy to purchase? :)
Off to ponder "convenience" alongside "value" and "quality" in a zen-like stance
The number one reason now is convenience.
I became convinced of this after we discovered someone was advertising oiur products at a 40% mark-up and then placing the order for the products on our site when they got an order and keeping the difference.
Their ads and listings appeared right along side ours. It seemed that a customer would buy from the first thing they clicked on regardless of price.
"Very few consumers click on the lowest price," he said. "They are looking for good prices and merchant reliability."
Another way to put it: buyer wants fair price from a trustworthy merchant.
I the bricks and mortor world I used to be in teh Antiques trade, time and time again id buy something from across teh street take to ashop further along and sell it at a profit.
Just because they couldnt be bothered to do it themselves.
Price to somepeople = quality which isnt so.
Never compete on price. Compete on cost.
Competing on price will only lower your profit margin and may create price war in which you will lose even more money. Competing on cost, on the other hand, makes you a more efficient producer/seller that allows you to lower your price (if you want to) or give a better product/service without decreasing your profit margin. This is the strategy used by such companies as Wallmart, Dell, Southwest Airlines, JetBlue, McDonald's, and other price leaders.
There's nothing wrong on competing on "price" as long as you know what you're doing. Price-conscious customers and price-sensitive products/services will always exist and can be very profitable to exploit as those companies above have shown.
You don't need to be everything to everybody ("We are the best product, the cheapest, the most convenient with the best and friendliest customer service"). All you need is to pick one attribute and focus on it like crazy. This is called branding.
Never compete on price. Compete on cost.
Much like the old adage - 'anyone can sell, it's buying where the skill is.'
True but don't you think that in some cases the buyer is aware and willing to pay for the convenience rather than the price? I know my wife shops that way (and I do) at times.
Better Cost: local store
(apparently) More Convenient: Ebay
The trouble with a low price strategy is that some other idiot will offer an even lower price - and you have nothing else to counter it. By contrast a reputation for quality, reliablity, prompt delivery, good customer service etc. takes time to build up, but is not easily imitated by competitors. There are other disadvantages as well - low price merchants are far more liley to have cash flow problems if sales falter even slightly. Heavy discounting relies on ever-increasing sales volumes to work. This works for Tesco but not for a small business.
Price is of course an element of the marketing mix, but it has a very short term impact - who can remember how much they paid for something a year ago? By contrast people remember things like poor service and low quality very vividly - indeed, for ever. I'll guess that we all know a shop, garage or restaurant which we would not patronise again if it was the last one on earth - not because of the prices charged but because of the unsatisfactory attitude of the owner/staff.
On the other side there are people who would crawl on their hands and knees over broken glass to get a discount of some kind. As far as we are concerned these customers do not exist. We will never get their business so why bother about them?
The particular examples discussed included local cost airlines, ebay and Amazon. The simplicity of these web sites hide the complexity of the back end from the user and make it as simple as possible to complete the transaction and go back to watching the telly.
Id just sell the value proposition anyday..trouble is the Ebay mentality and Ebay itself makes it tough ....
the whole fun of e-commerce is that its like a laundromat...people drop in quarters, you open the machines in the Am, and deposit the money...keep the place clean, easy to use, reliable, people keep coming, minimal interaction on your part....
With the advent of Ebay, everythings open to negotiation....i've had people spend hours and hours online just to save a couple of bucks...it's ludicrous...
