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Retailers Dread Phone-Wielding Shoppers

Soulskill posted more than 3 years ago | from the by-grabthar's-hammer,-what-a-savings dept.

Businesses 725

Ponca City writes "The WSJ reports that until recently, retailers could reasonably assume that if they just lured shoppers into stores with enticing specials, the customers could be coaxed into buying more profitable stuff too. But now, marketers must contend with shoppers who can use their smartphones inside stores to check whether the specials are really so special. 'The retailer's advantage has been eroded,' says analyst Greg Girard, adding that roughly 45% of customers with smartphones had used them to perform due diligence on a store's prices. 'The four walls of the store have become porous.' Although store executives publicly welcome a price-transparent world, retail experts don't expect all chains to measure up to the harsh judgment of mobile price comparisons, and some will need to find new ways to survive. 'Only a couple of retailers can play the lowest-price game,' says Noam Paransky. 'This is going to accelerate the demise of retailers who do not have either competitive pricing or a standout store experience.'"

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So, the system works? (4, Insightful)

bytethese (1372715) | more than 3 years ago | (#34586746)

'This is going to accelerate the demise of retailers who do not have either competitive pricing or a standout store experience.'

Be creative? Negotiate better wholesale costs so that you can offer your customers lower prices? If not, someone else will. Isn't that capitalism?

If a restaurant had better food, a nicer atmosphere and cheaper prices, wouldn't you frequent that place as well?

Re:So, the system works? (1)

Anonymous Coward | more than 3 years ago | (#34586860)

Isn't that capitalism?

And I, for one, welcome our new Amazon.com overlords.

Re:So, the system works? (5, Interesting)

Abstrackt (609015) | more than 3 years ago | (#34586882)

If the fact that Wal-Mart is the only local place I can buy my clothes and groceries is a sign the system is working I'm not so sure I want it to work. I'm not saying we should regulate the hell out of everything but I really miss having other options when I shop.

Re:So, the system works? (3, Insightful)

scourfish (573542) | more than 3 years ago | (#34587130)

I'm not saying we should regulate the hell out of everything but I really miss having other options when I shop.

In the city to which I'm currently residing in Kentucky (you know, south of the Mason-Dixon, where all of those gun-toting conservatives people love to make fun of so much) there is a Walmart, at least 2 Meijers, several Kroger's, a bunch of specialty ethnic stores, a whole foods type co-op, along with both chain electronics stores and several specialty shops all over the place. "Other options" are doing just fine.

Re:So, the system works? (4, Insightful)

erroneus (253617) | more than 3 years ago | (#34587164)

I wouldn't go so far as to say that it's working. People are STILL pretty stupid. Have you noticed that brand markers and logos are getting larger and larger? This is because they are trying to convince the public that they aren't wearing clothes so much as they are wearing labels. (I would say they have been pretty successful so far!) So there's still plenty of room to exploit common consumer stupidity.

Re:So, the system works? (1)

Antisyzygy (1495469) | more than 3 years ago | (#34587230)

Just bought some Abercrombie shirts for 13 a piece. Not bad considering the fabric is high quality and they fit me really well. Only an idiot buys big label shirts for the label or at full price.

Re:So, the system works? (1)

Pojut (1027544) | more than 3 years ago | (#34587242)

My wife and I go out of our way to make sure any clothes we buy keep their brand logos on the tag in the back...there's absolutely no reason to pay $50 for a shirt at Abercrombie, American Eagle, or any of those places when it's the same $10 shirt sold at Target or Wal-Mart.

All of the brands worth paying $50 for a shirt keep their logos in check, because they let the quality of the product do the talkin'.

Re:So, the system works? (1)

Pojut (1027544) | more than 3 years ago | (#34587292)

Note that we don't shop at Wal-Mart or Target for clothing, I was just pointing out the quality of clothing is pretty much the same. It's similar to the "expensive wine label" effect.

copyright (0)

Anonymous Coward | more than 3 years ago | (#34587360)

Part of the huge and tacky logos on the clothes is to prevent other companies from copying their design. Fashion design is not protected under law (copyrightable), so companies make knock off of each other all the time, sometimes with cheaper fabric to justify lower price.

To protect their designs, companies plaster their logo all over the clothes - and this is not with just crappy brands, Chanel, LV, Gucci all do this with their sunglasses and other products - because a company logo is trademark-able and thus protected from being copied.

However, because fashion is so fickle to consumer's demands; and tastes change every season; and because the copyright/ trademark office is slow, fashion houses sees the practice of registering their design to be futile. Like the recording company that signs up tons of little bands and hope one of them becomes a cash cow, the fashion industry hires tons of talented designers out of college, hoping one of them will make *the* design that touches the public's senses. And like the recording industry, the pay is shit for the designers, if any.

Re:So, the system works? (4, Insightful)

kenrblan (1388237) | more than 3 years ago | (#34587178)

I'm with you on this, and that is one of many reasons I try to avoid Wal-Mart. If the end game is that only one store is left in the race to the bottom on price alone, the end result is a total monopoly. At that point, the winning retailer (Wal-Mart) is no longer required to keep the prices low since there is no longer a competitive need. Of course, the free market capitalism evangelists would claim that another store is free to open to compete. The problem with that is the barrier to entry would be beyond any realistic capability and the competitor could be easily squashed by a short term price adjustment from the monopoly. The good news is that there are currently enough competing stores that actually beat Wal-Mart on some prices, quality, or convenience to keep that from happening on the national level. The problem is that those retailers primarily exist in the larger metropolitan areas and not in towns of populations below 50,000 where competition is desperately needed.

Additionally, the smartphone apps are probably shedding the light on the fact that stores other than Wal-Mart often have a better price on many items. That is something I had observed in comparing prices on groceries when a Super-Center threatened the existence of the local grocery stores in the town in which I previously lived. Just because a store says it always has the low price in its advertisement, it doesn't make it true.

Re:So, the system works? (1)

cygnwolf (601176) | more than 3 years ago | (#34586916)

[quote] Be creative? Negotiate better wholesale costs so that you can offer your customers lower prices? If not, someone else will.[/quote] And that someone else is Wal-Mart, with their huge market share and buying power to force the manufacturers into giving them a better price than Mom and Pop could ever hope to negotiate.

Re:So, the system works? (1)

bytethese (1372715) | more than 3 years ago | (#34587042)

Unfortunately I can't attest to that, we don't have any Wal-mart's at all in NYC and I seem to be able to shop ok. :)

I work at a large business that often negotiates with vendors for the best prices. Ultimately not everyone will want to go to Wal-mart and would like to have choice. If the service was better, return policy easier or something else, but the prices slightly higher, it may be worth it for me to shop at Wal-mart's closest competitor. Leads to the "creativity" part of the equation.

Re:So, the system works? (1)

cygnwolf (601176) | more than 3 years ago | (#34587152)

I work at a large business that often negotiates with vendors for the best prices

See, reference the part where I said Mom and Pop. by that I mean small business, held by some to be the foundation of the American opportunity. Admittedly not the way business is going these days, and this article is highlighting another nail in that coffin.

Re:So, the system works? (2)

bytethese (1372715) | more than 3 years ago | (#34587290)

See, reference the part where I said Mom and Pop

Valid argument, but see the part above about creativity. :) For example, when I have choice in flying, I sometimes choose JetBlue even though there are cheaper options, because the experience as a whole (Terminal 5, crew, TV in seat) is usually better than the competition. Or when I needed a large screen TV. I went to Best Buy, Circuit City (when they were open) and a local shop here in NYC called J&R. I ultimately went with J&R.

Re:So, the system works? (2)

cygnwolf (601176) | more than 3 years ago | (#34587106)

Not to self. Preview is your friend.

Re:So, the system works? (1)

Magada (741361) | more than 3 years ago | (#34586922)

Mmm creativity.
Step 1: Tinfoil, and lots of it. Metallic mesh for windows. If you're a mom-and-pop outfit, you may skip step 2.

Step 2: Just to be sure, jam the heck out of GPRS, 3G and 4G frequencies, provide free wi-fi on the premises but route wi-fi traffic through a filtering proxy. Make sure to also provide a micro-cell so you can filter SMS. If all else fails, start jamming voice traffic as well.

Step 3: Profit!

Re:So, the system works? (1)

dreamchaser (49529) | more than 3 years ago | (#34587008)

I know you're being facetious but that isn't allowed under US FCC regulations. Cell jamming of any kind is forbidden.

Re:So, the system works? (1)

Magada (741361) | more than 3 years ago | (#34587166)

Is it now? Well, then we must stick to just the tinfoil. We'll call it a "thermal coating" and brag about how green we are. Maybe we can redeem some carbon credits too?

The free wi-fi can stay, I assume? Or is there a law against that as well?

Re:So, the system works? (1)

Lumpy (12016) | more than 3 years ago | (#34587220)

Metallic tint for the windows is better. Plus you will save money on HVAC

Re:So, the system works? (5, Insightful)

mdarksbane (587589) | more than 3 years ago | (#34587014)

I regularly pay a little more for goods that I know less about if I got good service. As long as the price is at least vaguely comparable, being able to physically touch and try out something is worth a bit of money to me. Especially when it's something where the salesperson helped me look at options, understood what I wanted, picked the best value for me, etc, and didn't just hand me which one they were pushing that week.

Of course... sometimes the markup is too high. I really wanted to buy a TV locally, but they "don't price match amazon," which means that the same TV at amazon was $1500 less... you've got to at least make the same ballpark.

Re:So, the system works? (2)

Antisyzygy (1495469) | more than 3 years ago | (#34587274)

I hate salesmen. The last guy I went to at a Conn's (electronics/appliance store) kept bothering me about buying a big TV. All I wanted was a cheaper TV and I had a size already in mind. He literally would not stop following me around and telling me to "OOooh! This TV is so nice though and there is great financing". I can do my own research.

Re:So, the system works? (3, Insightful)

MightyYar (622222) | more than 3 years ago | (#34587282)

you've got to at least make the same ballpark.

Exactly, I just willingly paid $50 more at a brick-and-mortar plumbing supply place for a specific toilet that was cheaper online. For one thing, I could go over and pick it up immediately, and for another, I didn't have to deal with having a delicate thing shipped to me.

Re:So, the system works? (1)

poetmatt (793785) | more than 3 years ago | (#34587054)

basically, they're saying that people who do a shitty job are going to fail faster, which is an overall good.

the people who do a good job are also going to succeed faster. So this means that brick and mortar shitstores like best buy will hopefully go out of business (and good riddance)

"To improve your shopping experience, (2)

Thyrsus (13292) | more than 3 years ago | (#34587076)

this store is now a cell-phone free environment."

There. If I predict it, it will be less likely. ;-)

That cell-phone free store... (0)

Anonymous Coward | more than 3 years ago | (#34587308)

...might just quickly become a customer-free store too.

That's my prediction.

Re:So, the system works? (2)

Lumpy (12016) | more than 3 years ago | (#34587202)

Yup, so you cant complain when the only store you can shop at is Walmart.

Walmart can buy 8000X more volume than any other store can so they can undercut everyone.

Fortunately most american shoppers are horribly shallow and dont care most about price but trendyness..

Abercrombie torn up jeans at $150.00 and a Aercrombie Sweatshirt that is lower quality than a Fruit of the loom but says "ABVERCROMBIE" on it and costs $65.00 compared to $19.00 is far more important.

I gotta look like I have money.... Oh and can you drive? I need to let mt BMW 525 sit for a month as I'm close to being over miles on it's lease. And it lets the neighbors see I have a BMW.

Re:So, the system works? (2)

natehoy (1608657) | more than 3 years ago | (#34587208)

Here's the problem. Running a brick-and-mortar store costs money. Not only do you have to have the store, but you still have to have the product shipped to the store and warehouse excess inventory, which is not quite as expensive as shipping it to the customer directly but not all that different. The overhead of the retail space (rent, heat, etc), the employees, the display models which usually have to be sold at a discount or disposed of at a loss, and all that makes the per-sale cost of doing business as a retailer significantly higher than that of a pure warehouse operation. You simply can't make up even a fraction of that by negotiating lower costs than what Amazon or NewEgg or Buy.com can get the same item for. Even if you can get a lower cost by 15%, your store costs will gobble that up and more. And you aren't getting lower costs than Amazon, their sheer volume ensures that they will probably have a lower cost than you do.

If you go into a store, that retailer is paying a great deal of money to show you that product on the display rack and allow you to twiddle with it. He's paying a great deal of money to have the item you want sitting on the shelf ready for immediate purchase. He's paying a great deal of money to have someone sitting there ready to at least make a half-assed attempt at answering your questions. He's not paying any less than his mail-order competitors for his product. In order to make a profit, he's got to charge more, so he has to figure out ways to get you in the store buying things he can make a profit on.

I'm not at all suggesting that you "owe" that retailer a sale - it's a free country. But if you go on Amazon and mail-order it to save $10 after spending an hour in a local retail store looking at the item and having their employee answer questions, and enough people do it, the retailer can't make a profit and is going to go out of business. You'll lose the local display of products that the retailer offers you (not to mention the local jobs that retailer offered your community, and the immediate availability of product when you're in a hurry to get something).

It's your decision. I'm just suggesting that throwing your local retailer a bone every now and then will help keep them around. They can't compete with the Amazon's of the world in price, their cost structure is much higher. But they offer you services Amazon can't (immediate availability of items, in-person local returns, display models, live human beings to answer questions, local jobs, etc).

If you don't value those services, then by all means shop from Amazon. Just don't crybaby when your local shops close up and you have to drive two hours to see anything in person, or you are limited to an in-person view of only what your local Wally World carries. Wal-Mart keeps their prices low by engaging in really, really strongarm price negotiations with their vendors, but their selection in any one type of item is usually pathetic and limited to the cheapest and junkiest of the product to keep the prices low.

Again, I'm not suggesting that the retailers have any sort of right to demand your commerce. They don't. The displays are there for you to use. It's a good idea, however, to acknowledge occasionally that those displays cost a lot of money, and consider whether you want them around for future shopping when looking at a few bucks' savings on an item you want. They simply can't match mailorder pricing. So you'll have to decide whether you want to see things before you buy them, and whether that service is worth anything to you.

Re:So, the system works? (1)

bytethese (1372715) | more than 3 years ago | (#34587384)

Sure, I wouldn't argue that a mid-range B&M shop can compete with Amazon, etc. but If I have 5 B&M shops all with the same item, I'd like to avoid making 5 stops to check the best price. If I can walk into my favorite shop of choice, show that their B&M competitor has a better price and can they beat/match it, then great.

Re:So, the system works? (1)

mcmonkey (96054) | more than 3 years ago | (#34587210)

I could go on a rant that companies can complete on something other than price; that you could offer customers a product that stands out in terms of quality or style; that some people do more than just buy at lowest possible price and not everything is a commodity.

But that would be a waste of time. Yes, such customers exist, but there are so few of them it's not worth mentioning to most retailers.

Just like the modern economy is a widening chasm between the poor and the rich, the marketplace will be dominated by the Walmarts where the $1.00 pack of 12 socks are made by children in near slave labor conditions paid pennies a day for socks that fall apart after a single use (but for $1, who complains?), and the high-end boutique where the $80 per pair socks are made by children in near slave labor conditions paid pennies a day for socks that fall apart after a single use (but wearing the same sock twice is for poor people).

Re:So, the system works? (1)

bluefoxlucid (723572) | more than 3 years ago | (#34587314)

So Best Buy is going to get a taste of what they did to CompUSA and Circuit City? The management at Best Buy--right from the executive level down to store management level--literally cheered when CompUSA and Circuit City were going out of business. I think the executives select aggressive, blood-thirsty drones for district management, who in turn select store managers of the same caliber. They all seemed abusive and shady to me, prone to lie and twist laws... I've seen best buy managers refuse to sell things at the posted price, and constantly play bait-and-switch games; this is the status quo there.

Great! (4, Insightful)

The MAZZTer (911996) | more than 3 years ago | (#34586756)

The retailer's advantage has been eroded

Fine by me.

This is going to accelerate the demise of retailers who do not have either competitive pricing or a standout store experience.

Good riddance.

Re:Great! (1)

Chrisq (894406) | more than 3 years ago | (#34587022)

The problem comes when there are only a few retailers left, many areas having only one close bye and they then put the prices up to a higher level than they were before.

Re:Great! (2)

Anonymous Coward | more than 3 years ago | (#34587038)

The retailer's advantage has been eroded

Fine by me.

This is going to accelerate the demise of retailers who do not have either competitive pricing or a standout store experience.

Good riddance.

You do understand that small stores cannot possibly compete on price with the likes of Walmart et al, right? It's not a question of greed or a lack of will, it's simple economics. In a world where only the lowest price store could exist you would only have a couple of companies in that sector, period.

And we all know what happens when there is a lack of competition...

Re:Great! (0)

Anonymous Coward | more than 3 years ago | (#34587326)

either competitive pricing or a standout store experience.

Any local store whose experience is like walmart is a store I already won't shop at.

Re:Great! (2)

jorenko (238937) | more than 3 years ago | (#34587382)

And that's where A Standout Store Experience comes in, if you're only willing to stick it out and read the last quarter of the sentence. Small stores need to have helpful, knowledgeable staff and excellent customer service; enough so to engender extreme customer loyalty.

In completely unrelated news (4, Funny)

elrous0 (869638) | more than 3 years ago | (#34586762)

Retailers soon to petition FCC to allow cell-blocking technology in private businesses.

Re:In completely unrelated news (1)

oh_my_080980980 (773867) | more than 3 years ago | (#34586838)

Don't think that's not already happening.

Re:In completely unrelated news (2)

mrsteveman1 (1010381) | more than 3 years ago | (#34586872)

That would never be permitted in public stores, people would stop shopping in them or stop buying as much and rush out of the store sooner, destroying whatever advantage the store gets for erecting a "wall of ignorance".

What if there's a family emergency? What if your kid got hurt at school? You simply can't screw with mobile connectivity anymore, it's too important.

Re:In completely unrelated news (0)

Anonymous Coward | more than 3 years ago | (#34586978)

What is the matter with you that you can't bear to be out of contact for fifteen minutes?

Re:In completely unrelated news (2)

Neil Boekend (1854906) | more than 3 years ago | (#34587052)

I would see such an action as a clear indication that they wish to screw me over with expensive products. I wouldn't buy anything there.

Re:In completely unrelated news (1)

davidbrit2 (775091) | more than 3 years ago | (#34587070)

Just build your store out of whatever Meijer uses. I can barely get my phone to work when I'm in their stores. (Which is even funnier when you consider the Meijer Find-It iPhone app that isn't terribly useful, mostly because of the aforementioned problem.)

Re:In completely unrelated news (1)

jgtg32a (1173373) | more than 3 years ago | (#34587120)

If they do it at the movie theaters I have no problem with this.

Re:In completely unrelated news (1)

Antisyzygy (1495469) | more than 3 years ago | (#34587298)

Happens in some casinos.

I did this (5, Informative)

fridaynightsmoke (1589903) | more than 3 years ago | (#34586782)

I used my phone to find the best prices when I was buying various white goods (fridge/freezer, washing machine, dishwasher) upon moving house, from a certain UK big-box electrical retailer.

Of course, the salesperson said "Oh no, we can't match internet prices" but it turns out that given a choice between a discounted sale and no sale, they can

Protip: You haven't got the best price until the salesperson has sheepishly had to ask the manager for authority twice.

Re:I did this (5, Insightful)

skgrey (1412883) | more than 3 years ago | (#34586852)

I used my iPhone and the Red Laser app to scan all the toys my kids wanted. It shows all the prices for the stores around me, as well as online. I got approached by at least one sales person asking me what I was doing, and Toys R Us specifically was not happy. I got approached by a floor manager after the sales person approached me, and he asked to see the app. He looked none too happy. Why in the world would I not check if I had the ability??

Re:I did this (4, Interesting)

DigiShaman (671371) | more than 3 years ago | (#34587182)

I'm willing to bet that while one product is cheaper at one store, another may be more expensive. It could be a washout when it's all said and done shopping. If I was a sales manager, I would be offering some incentive to my customers to do all their shopping at my store at once. The more they spend, the greater their savings. I'm willing to bet it would keep people from playing the numbers game with you, and who want's to bounce around stores just to save a few bucks on a toy anyways?

Used this at HHGregg before (1)

Shivetya (243324) | more than 3 years ago | (#34587116)

and I am going to try it again this year. Amazing what prices they will match when it comes to getting a sale. This year I need two 42 LCD televisions, they want 699 whereas I can get them from a certain major online retailer wants 599 and others 589 with no tax or shipping costs.

Will be curious what price they will go down to.

Uniqueness (3, Informative)

truthsearch (249536) | more than 3 years ago | (#34586792)

Most stores sell the same things that are found everywhere. The most profitable stores are often specialty, where there's little option to find a product elsewhere. In the long run we might see more manufacturer stores, bypassing the generic middlemen. E.g., Apple.

+1 Rationality (2)

TaoPhoenix (980487) | more than 3 years ago | (#34586810)

Awww. Store can't bamboozle poor customers with flashy displays anymore?

Re:+1 Rationality (0)

Anonymous Coward | more than 3 years ago | (#34587252)

Awww. Store can't bamboozle poor customers with flashy displays anymore?

Also the bullshit of "60% OFF! New Price ONLY $99.99!"

Then you see other brick and mortar stores sell it for $89.99 and the internet is $69.99. The original price was pulled out of their asses. The Furniture business are the worst offenders.

Or some of the internet stores will have a great low price but make it up in shipping and handling and then some. So the $69.99 item become $110.15 after S&H. Then you get the package and it cost them less than $10 to ship it and the handling works out to $200/hr assuming they have a slow poke that only fill 20 orders an hour.

Books (3, Informative)

Anonymous Coward | more than 3 years ago | (#34586870)

If I walk into a store and something is $30 and it's $27 online. I'll probably just buy it right there.

But the other day I went to get a book from Borders and it was $30 in the store and $15 online. For that I'll just buy it when I get home.

At Barnes & Noble the in store price for something like Rosetta Stone is $600, but it's $450 online.

(I think everything is just 20 to 30% more expensive in the store.. regardless of size/weight/etc.

Re:Books (4, Interesting)

MyLongNickName (822545) | more than 3 years ago | (#34586940)

This reminds me of the results of a survey. People were asked "If you found out that this $100 piece of software were only $50 across town, would you leave this store, drive across town and buy it cheaper?" The answer was almost always less. Others were asked "If you found out that this $1,000 computer were available for $950 across town, would you leave this store and by it cheaper?" Fewer than half said yes.

So why is the value of our time less for more expensive products? It seems people are fundamentally illogical. Yes, I know... I must be new here.

Re:Books (3, Interesting)

mdarksbane (587589) | more than 3 years ago | (#34587066)

People working with large numbers deal in percentages and proportions. It's how our monkey brains try to handle values that are so much larger than anything we were designed for.

There's also the question of worth. Something that is only worth $50 might not be worth a purchase of $100, but something that is worth $950 most likely is probably still worth $1000 to someone.

This is, of course, why the most efficient use of your time for most people is in negotiating a better deal on your car or your house.

Re:Books (1)

Jakester2K (612607) | more than 3 years ago | (#34587078)

This reminds me of the results of a survey. People were asked "If you found out that this $100 piece of software were only $50 across town, would you leave this store, drive across town and buy it cheaper?" The answer was almost always less. Others were asked "If you found out that this $1,000 computer were available for $950 across town, would you leave this store and by it cheaper?" Fewer than half said yes.

So why is the value of our time less for more expensive products? It seems people are fundamentally illogical. Yes, I know... I must be new here.

What does "The answer was almost always less" mean? You mean "yes," yes?

If the numbers you quote are accurate, there's no real logical flaw here. 50% savings is far more attractive than 5%, and the return on the inconvenience is far more worth it.

You could probably conduct these survey with different numbers - like orders of magnitude different - and get similar results.

Re:Books (1)

MyLongNickName (822545) | more than 3 years ago | (#34587302)

You are correct, I meant "yes".

ROI is not applicable here.... at least not in the way you are looking at it. My investment is the drive across town, not the purchase price of the item. In instance one you say that your drive is worth less than $50. In the second you say that your drive is worth more than the $50 savings.

Re:Books (1)

Chrisq (894406) | more than 3 years ago | (#34587118)

Its a well known affect. Logically you should worry as much about saving £50 when negotiating a house sale as when buying a £100 piece of software, but few people do. It also leads to the "marginal extra" situation which makes people buy more extras when making a big purchase. If I offered someone on the street a set of mud flaps for £50 and alloy wheels for £500 most would say no - but many would say "I might as well have the trim" when buying a £15,000 car!

Re:Books (1)

Sancho (17056) | more than 3 years ago | (#34587122)

Personally, I don't want to be taken for a ride. In the first case, the store has over 100% markup, which offends me if another store is able to sell it at a much lower price. I'm not only likely to go to that other store, but I'm likely to stop shopping at the first one.

It's not about the flat savings, it's about overcharging.

Re:Books (1)

Yvan256 (722131) | more than 3 years ago | (#34587162)

Going from 100 to 50 means a "50% discount" while going from 1000 to 950 only means a "5% discount".

So I guess they're thinking "I'm not driving across town for a 5% discount".

Re:Books (0)

Anonymous Coward | more than 3 years ago | (#34587180)

That is not a completely fair comparison. We don't measure value in absolute terms, but by relative terms.

A $100 item that only costs $50 when bought online is a price reduction of 50%. A $1000 item that costs $950 online only represents a price reduction of 5%.

Think about it this way. Suppose you were rich and have a million dollars in your wallet. I come to you and ask you for 10 bucks. If you gave it to me, how much loss would you really feel now that you are less-richer than you were previously by 10 dollars? You still have $999,990 left. Now suppose you are poor and only have 20 dollars in your wallet. I come and ask you for 10 bucks. Wouldn't you think twice before giving me 10 bucks? You are losing half of what you have; you will definitely feel the loss of that money. Incidentally, I believe this is the reason why people argue against flat tax (it's harder on the poor folks than it is on the rich ones).

Going back to your example, if the $1000 item cost $500 online, you would definitely see more people purchasing it online. I don't think people are fundamentally illogical. I think it's just that they do things for logical reasons that they themselves are not aware of.

I could be wrong though. Someone please do correct me if I am. Thanks.

Re:Books (2)

MyLongNickName (822545) | more than 3 years ago | (#34587342)

It is a perfectly fair comparison. In fact, this info comes from a marketing class and is used as an example of how you can use psychological games to get folks to pay more. No... this wasn't the exact term used in the class... terms like "price discrimination and segmentation" are used.

But the bottom line, the rationale you are citing is used by retailers to extract more money out of you than you logically should.

Re:Books (1)

davidbrit2 (775091) | more than 3 years ago | (#34587196)

It's a percentage/false-economy thing, I'd bet. If I've got $1,000 to throw at software, I'm probably not going to be too bothered by a 5% difference. But with $100 being the upper end of "cheap" software, I might be a bit more concerned with the 50% difference.

If I'm performing racing modifications for my car, I'll probably tear out the back seats to reduce weight. But if I've got a large yacht, am I going to throw a few deck chairs overboard to improve performance and fuel economy? Probably not.

Re:Relative Savings (2)

TaoPhoenix (980487) | more than 3 years ago | (#34587294)

I'll chip in the the "rationality of the decision". Someone deciding whether to change their habits on $50 vs $100 is indicating they are concerned with the overall effect of the purchase on their budget. Someone making a capital investment of $1000 for a computer shouldn't be worrying about where their next necessity purchase is coming from. It's like the famous joke "I'll take 2 Angus Bacon Cheeseburger meals, supersized, but make the drinks diet coke because I'm on a diet".

When you get home? (1)

way2trivial (601132) | more than 3 years ago | (#34587074)

pfft.. order it standing there?

Perfect market? (1)

XxtraLarGe (551297) | more than 3 years ago | (#34586874)

It sounds like technology is enabling us to get closer & closer to a perfect market [wikipedia.org] .

Re:Perfect market? (0)

Anonymous Coward | more than 3 years ago | (#34587232)

It sounds like technology is enabling us to get closer & closer to a perfect market [wikipedia.org] .

Sorry but you couldn't be more wrong.

"In Economics, a perfect market is defined by several conditions, collectively called Perfect Competition. Among these conditions are

        * Perfect market information
        * No participant with market power to set prices
        * No barriers to entry or exit
        * Equal access to production technology"

----

Perfect market information is more than just the price of the goods. It's where it comes from - did slave kids make it for pennies? Alot of that information is still unknown to the consumer and obscured by big business as much as possible.

As for the last three points mentioned above - we are so far away from this it's actually ridiculous. If retail in general is about to become even more price competitive this will only get worse. Small companies with little buying power get squeezed out while the few big players that remain clean house. The bigger companies have much greater access to production technology, no barrier to entry (within reason) is too high for them and the big boys most definitely set the market prices.

Best buy? (1)

jaymz666 (34050) | more than 3 years ago | (#34586876)

Best buy has qr codes on a lot of their price tags. How do they figure people to use those without a smartphone.

Re:Best buy? (1)

Kral_Blbec (1201285) | more than 3 years ago | (#34586926)

They also have an official best buy android app. I guess they are trying to lure the wanna-be nerds who dont know how horrible their prices are.

Re:Best buy? (1)

whitehaint (1883260) | more than 3 years ago | (#34587090)

Ugh, I have to laugh when I need to get something there that my local guy doesn't have. Just looking at hard drive enclosures at least 150% more cost. I was surprised they had a blu ray player for one dollar more than walmart though.

Re:Best buy? (1)

MightyYar (622222) | more than 3 years ago | (#34587340)

The last time I bought a camera, they were within a few pennies of the lowest cost (before tax, natch).

Re:Best buy? (1)

jgtg32a (1173373) | more than 3 years ago | (#34587176)

The Amazon app (iOS) allows you to take a picture of the product itself and it will match it up.

Wouldn't it be ironic (1, Insightful)

suso (153703) | more than 3 years ago | (#34586878)

Wouldn't it be ironic if later stores started banning phone use in stores?

Re:Wouldn't it be ironic (1)

Yvan256 (722131) | more than 3 years ago | (#34587086)

Yeah, what's next? Movie theaters banning bringing food and drinks from your home? Hollywood telling us that we can't format-shift the DVDs we buy?

Re:Wouldn't it be ironic (1)

davidbrit2 (775091) | more than 3 years ago | (#34587216)

Then I'd wager customers will skip the bother and just order online or go somewhere else first. Talk about cutting off one's nose to spite one's face.

And Nothing of Value was Lost (5, Interesting)

rwv (1636355) | more than 3 years ago | (#34586886)

Stores can no longer use tricks to get me to spend my money there, and I'm okay with that.

I actually bought an iPod case at Best Buy the other day for $11 knowing it was available on Amazon for $7. The brick-and-mortar shopping experience is still worth it if I want something now or doing what to worry about paying for shipping (usually I buy *more* than I need at Amazon for small purchases to qualify for free shipping).

At the end of the day, the customer wins. The best stores win. And crappy stores lose. This is a good thing.

Re:And Nothing of Value was Lost (1)

DogDude (805747) | more than 3 years ago | (#34587100)

"The best stores win. And crappy stores lose"

Best Buy qualifies as one of the "best stores" in your mind? Seriously? Brain dead staff, and somebody checking your receipt at the door? Those are some amazingly low standards you have!

Re:And Nothing of Value was Lost (1)

Antisyzygy (1495469) | more than 3 years ago | (#34587386)

Shit try working there. The type of customers Best Buy gets are morons. I worked for Geek squad in college and I had to deal with more idiots and rude customers than I could handle. Routinely I would get blamed for their computer problems or stupidity and several times I had people take my name down so they could go bitch to the manager if I didn't get their computer done before everyone else that came before them.

Re:And Nothing of Value was Lost (0)

Anonymous Coward | more than 3 years ago | (#34587154)

I actually bought an iPod case at Best Buy the other day for $11 knowing it was available on Amazon for $7. The brick-and-mortar shopping experience is still worth it if I want something now or doing what to worry about paying for shipping (usually I buy *more* than I need at Amazon for small purchases to qualify for free shipping).

Shipping is the biggie. Some places still only ship to the billing address, which is no good to me unless they can give me a very narrow delivery window, preferably at the weekend. Unless they can do that, or deliver to my place of work, they're no good to me. I'll certainly pay a moderate premium for the convenience of taking a box home with me - and having somewhere I can return it if there's a problem, instead of having to deal with returns via mail as well.

I also enjoy browsing and spur of the moment purchases, especially of smaller items - books, CDs, DVDs. HMV is apparently struggling in the UK, largely as a result of internet competition, but it's not helping itself - the choice was very limited. There's just so much stuff now that you can't buy anywhere except on the internet, certainly outside of the biggest cities.

(posting anonymously because the login doesn't seem to be working right now. I was logged on in Chrome, but the edit boxes don't work properly. Seriously, for a geek site, it's amazing that this one just doesn't work as well as 99% of the other forum sites out there. I digress).

Offer something else in return (0)

Anonymous Coward | more than 3 years ago | (#34586898)

Maybe if you can't offer a better (or the same) price, have a better and cheaper extended protection plan. Many people still waste money on those.

Added value (1)

danhaas (891773) | more than 3 years ago | (#34586962)

If the retailer isn't adding any benefit to the purchase, such as on site information, delivery time, ease of return, product adjustment for you needs, or just a cozy ambient, then he shouldn't get his cut. If the retailer is asking too high a price to add those benefits, then he will have to adjust.

You can buy coffee through the internet, or in major supermarkets, much cheaper than in a coffee shop. But coffee shops will still be around because they provide a service and they add value to the product.

Good retailers will stay out of the price wars (1)

Anonymous Coward | more than 3 years ago | (#34586994)

Good retailers will avoid the race to the bottom and compete on the basis of, heaven forbid, SERVICE. If I need a completely interchangeable widget, sure I'll shop on price. If there's no differentiation between brand A and brand B, you don't need help to get the product that best suits you.

For the case of more complicated purchasing decisions, it makes sense to go to a retailer that can help you find the product that meets your needs the best. This isn't even a novel idea. Stores dedicated to the sport of running which, as near as I can tell, sell primarily shoes continue to exist despite the existence of cheap shoes at Wal-Mart, Target, etc.

Pretty much any product targeted to people with a specific need fits this model. You don't go to Best Buy for your latest gaming computer any more than you buy running shoes at Wal-Mart. The only limit to this is whether or not a market is big enough to support specialty stores locally. When it's not (like gaming computers in most areas) the internet fills the gap (newegg, etc).

It's not hard to see the way out of the problem if you're not so short-sighted that you shop on the basis of price above all else.

Stores? (1)

j00r0m4nc3r (959816) | more than 3 years ago | (#34587004)

What are these "stores" that you speak of? Some quaint little novelty from days of yore?

Re:Stores? (1)

DogDude (805747) | more than 3 years ago | (#34587134)

Some of us still care about our local communities. Not all of us are willing to sell out our community so that we can save an extra nickel. But thanks to people like you, retail stores may very well someday be gone altogether.

This actually isn't all that good (1)

sahonen (680948) | more than 3 years ago | (#34587012)

Rooting for all the stores that can't compete on price to go out of business is rooting for Wal-Mart.

Re:This actually isn't all that good (1)

whitehaint (1883260) | more than 3 years ago | (#34587170)

Well look at it this way, if Walmart can sell item X for 200 dollars and still make money, why does some other big box like Best Buy feel the need to charge 300 dollars for that same item? Service and knowledge are equally shit, the items are the same, only the profit has been increased to feed the greedy. All this will serve to do is hurt those businesses that bemoan their poor revenue while jacking prices up beyond anything reasonable. OF course, if the stores would negotiate on the prices it could save them too. My local computer store has the highest price on parts for a new build, if they would give a discount for buying everything there (~1,000 bucks) I would go with them, but because they don't negotiate they lose out to the internet stores.

Re:This actually isn't all that good (1)

alen (225700) | more than 3 years ago | (#34587328)

not really

i know people that shop in wally world and a lot of them say that a lot of things are more expensive. and electronics are only cheaper in wally world because they are usually either brand X stuff, special models that are made cheaper or just the cheapest configuration for something like computers.

on things like X-Boxes and iPods the retailers don't make any money. the money is made on the accessories. the $300 x-box means $280 in revenue for the store after you account for the CC merchant fee. then you have to pay Microsoft for the x-box and with the cost of doing business it's a loss leader for the store

Self Price Match (5, Interesting)

Cemu (968469) | more than 3 years ago | (#34587034)

I recently shopped at both Best Buy and Sears and discovered that their online store sale prices were $80 and $70 cheaper than what their brick and mortar store could offer. I showed a sales member their store's site on my phone but it turns out that they can't match their own prices. I do, however, like both stores' website's option to buy now and pickup in the store. Yep, I bought the item online while in the store and just walked over to customer service and picked it up 10 minutes later.

Re:Self Price Match (1)

Lumpy (12016) | more than 3 years ago | (#34587348)

Sears buy online and click on "pickup at store". then drive to store and pick it up.

Total price and instant Gratification (2)

Yvan256 (722131) | more than 3 years ago | (#34587046)

Yes it may be cheaper online, but don't forget to add the shipping cost. Not all places offer free shipping and sometimes there's a minimum amount to spend to get the free shipping, etc. Don't forget cross-border delays and charges or you'll be shockingly sorry. Especially those brokerage fees, which often are more than the shipping cost added with the customs fees.

But where the physical retail stores still have the advantage is in how fast you're getting what you want, if they have it in stock.

With these two things in mind, the only difference is that you can compare prices with other nearby physical stores without actually having to drive there to check the prices. The real competition is still the other stores, nothing really changed if you want something "right now".

Re:Total price and instant Gratification (1)

Walter White (1573805) | more than 3 years ago | (#34587272)

I also consider how many times I get to the store and find the item not in stock. If I wind up going store to store looking for something, my time and gasoline costs quickly burn through what I could have paid for shipping.

My phone saved me just the other day... (1)

BobMcD (601576) | more than 3 years ago | (#34587072)

I got on the website, researched exactly the TV I wanted, checked stock online, and headed in to actually buy the thing. It was a 42 inch LDC for a very nice price, and they had eleven of them in the store. When I arrived in the department, I couldn't find any on display. I found the 42 inch LED, but it was close to $200 higher. I asked the sales guy, and he said they didn't have the other one, but the LED as better anyway. I made him look it up in the computer. He wasn't happy, but I eventually got the TV I actually wanted...

Let me just play (1)

Ryanrule (1657199) | more than 3 years ago | (#34587102)

my little violin here. I'll be performing at the "former retail worker's schadenfraude party" this saturday.

What they are really saying... (5, Insightful)

JavaBear (9872) | more than 3 years ago | (#34587124)

"We are afraid now that customers can figure out we are cheating them with false advertising, before we manage to snatch their money."

I was actaully doing this over 2 weeks ago (1)

eaddict (148006) | more than 3 years ago | (#34587132)

We were at Best Buy and the X Box game we wanted was out. I took a shot of the product bar code and found it nearby. I really didn't care so much about the savings and being able to get it right now without the 'oh, we can get it shipped to this store". I managed to locate it AND call the store that had it to hold it while I was in Best Buy.

I would hate to be a retailer in this day and age...

Devil's advocate (5, Insightful)

Arancaytar (966377) | more than 3 years ago | (#34587212)

It's a good thing to give the customers more transparency in who they do business with, but I am concerned that this will reduce competition even further to price warfare. Quality, safety, environmental sustainability and the welfare of employees may take even more of a backseat than it already does.

Needless to say, this transparency is not the root cause or a bad thing. However, with shoppers caring more about price than anything else, it is vital to regulate industry and retail to ensure that companies do not rape their people and the environment to stay competitive.

Free wi-fi (1)

Culture20 (968837) | more than 3 years ago | (#34587214)

This is why a lot of stores provide free wi-fi. Strangely, competitors sites are slow to load. Hmm.

The elephant in the room (1)

Walter White (1573805) | more than 3 years ago | (#34587228)

If it's anything much more than impulse buy, I know the price before I even enter the store. And often I find the price is less at Internet based retailers so I might not even make the trip. I suspect that has more impact than price shopping between various brick and mortar retailers. I have a smart phone but have not used it to price shop because I have no need.

Technological solution (1)

operagost (62405) | more than 3 years ago | (#34587238)

Maybe this is why I can't get a cell signal inside Home Depot or Kohl's. Technological countermeasures?

Reserve Online (0)

Anonymous Coward | more than 3 years ago | (#34587246)

I frequently walk into a shop, browse, and then see if the shop has cheaper deals online.

If they do, I reserve to collect in store then and there, and typically get 10% off the shelf price!

Win-Win! (ish...)

I do this all the time. (1)

drunkennewfiemidget (712572) | more than 3 years ago | (#34587286)

A lot of those, "WOW LOOK AT OUR PRICE" is usually still higher than I can get it somewhere else.

Competition is good, right?

That said, I'll still shop at a mom & pop store with better service for a few bucks more than a big chain since -- especially on big ticket items, since I know that if I have an issue with it, they'll still be there to talk to me, whereas the 16 year old who sold me that TV at best buy has moved to the produce section.

Uh, oh! Capitalism happened! (1)

Digital Vomit (891734) | more than 3 years ago | (#34587372)

Capitalism requires informed consumers in order to work properly.
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