Researchers at Katholieke Universiteit Leuven analyzed retail situations in which a promotional discount was offered in one of the channels, but not the other. As common sense predicts, shoppers who were aware of the difference in pricing moved their purchases away from the channel which maintained the regular price and toward the one offering the discount.
What these research findings did add to our common sense notions was the finding that the cross-channel cannibalization effect was stronger when the discount was online. Internet specials ate away at storefront sales revenues more than storefront specials ate away at internet sales revenues. Also, the effects in both directions were stronger for customers loyal to the retailer.
So stay aware that internet specials can significantly deprive you of the benefits in loyal customers visiting your store. Benefits such as the opportunities to get to know the customer better, stay up-to-date on their needs, personalize your selling, and appeal to a broad range of sense modalities. One way to meet this challenge is to provide purchasers an incentive for picking up at your store merchandise ordered online.
Another challenge with different pricing for your online store than for your bricks-and-mortar store is a need to explain why. If you do find yourself in this situation, the way you frame the explanation makes a difference. With a short-term promotional difference, it’s best to describe why the internet price is lower.
For your profitability: Sell Well: What Really Moves Your Shoppers
Click below for more:
Utilize Multichannel with Hedonic Selling
Offer Exclusive Price Discounts Cautiously
Use Partitioned Pricing to Highlight Benefits
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