Price comparison is a behavioural phenomenon dictating the current retail climate, for both retailers and consumers. Retailers face a daily battle to win customers, who are constantly looking for the best possible price, mostly through the use of mobile devices. Consumers are reluctant to accept the first price they see, often turning to comparison sites to better inform their purchasing decisions.
Companies such as Kelkoo and MoneySuperMarket.com have shaken up the traditional shopping mentality and retailers have had to become far more competitive with each other to ensure they’re consistently winning customers.
Consumers trade on a bargain. If a product is too expensive, more often than not they will shop elsewhere. Tradedoubler’s own research shows that nearly half (47 per cent) of consumers use their smartphone to compare prices, with 29 per cent going on to buy that product or service they’ve compared on their mobile device.
Mobile has accelerated this price comparison culture. Consumers no longer rely on second or third-hand information about particular brands; they are completely autonomous when it comes to researching products and gathering information or feedback on the quality of these products. In essence, consumers now inform themselves.
The influence of price comparison sites actually begins earlier in the purchasing cycle, than was previously thought. This is because shoppers are looking for inspiration or ideas about certain products, and base much of their decision on the price of the product in question.
Mobile has fuelled this behaviour and it poses a significant problem for retailers and marketers, who may experience difficulty influencing the purchasing decision of prospective customers. But retailers and marketers should view mobile devices as another portal through which to reach consumers and draw them in to a final purchase. Using mobile devices in conjunction with in-store marketing efforts will enable retailers to really appeal to their target consumers, who are constantly on the move.
The power of mobile devices can only be fully realised if retailers acknowledge that they’re not just used as a pure purchasing channel. The research from Tradedoubler categorically demonstrates that the true power of mobile devices lies in their ability to inform, influence and advise. Indeed, 45 per cent of smartphone users use their mobile device to browse for products when commuting, while 52 per cent browse on their smartphone when in a café or bar.
There is only so much retailers can do with attractive shop interfaces and in-store offers. The crucial element is getting shoppers in to the store in the first place. This is where the development of a communications strategy that harnesses the power and possibilities of mobile is so important. The hard truth is that if a product or service is deemed too expensive, consumers will look for an alternative, and they’ll use price comparison sites to inform this decision. The portability of smartphones and tablets means that consumers can be targeted on the move, with relevant marketing messages including vouchers and incentives.
As a result of using mobile in store, consumers are more likely to change their purchasing decision. Tradedoubler’s research found that one in five consumers change their mind about purchasing and only 19 per cent actually buy the product from the store they are in. What this means is that retailers who connect with customers via mobile while they are in store have a real opportunity to maximise sales or guard against losing sales.
For consumers, the abundance of price comparison sites provides a route to getting the best possible deal, but for retailers it has essentially resulted in a form of price regulation that cannot be ignored or avoided, without causing a sharp drop in sales.
The price comparison era has taken over the retail world and mobile has aided this. Mobile is now an integral part of the purchasing path and retailers must look at how consumers are using their mobile devices in the price comparison process. Price comparison sites shouldn’t be seen as a hindrance or a barrier to potential sales success; they should in fact be seen as a platform on which retailers can engage with bargain-hungry consumers, by advertising various deals and offers to persuade consumers to visit their online and offline stores.
Retailers must make understanding the behaviour of the consumer a priority. Realising that shoppers don’t accept the first price they see, and that mobile is fuelling this reluctance to settle on the primary price, is critical to maximising sales and building a stronger relationship with customers.