If you think shopping online is cheaper than shopping in-store, then think again. Retailers are working hard towards matching the prices online and offline, despite the general consensus that online shopping can save people a lot of money.
“Once upon a time, you’d see the online prices were way lower than retail price. What started to happen over time was that the price gap shrunk,” said Ashish Panjabi, COO of Jacky’s Retail.
The cost of running a brick and mortar store can be considerably greater than for an online store. Factors such as rent, electricity, payroll, and fixtures can contribute to the gross margin and overhead of doing business. But how have the online versus in-store prices started becoming similar and why have people not noticed it?
With various retail arms including electronics, the online retailers have increased the prices far more than physical stores. However, since new products keep coming into the market regularly at varying price points, the increase in prices and margins go unnoticed.
“Prices from the online retailers actually went up far more than the physical retailers. Because of the new models (of phones and electronics) that come in, you don’t notice it. Every time the new model comes in, they reprice it and the chance for recalibrating prices comes in too,” he explained.
Every business aims at profitability and having realised their standing in the market, online retailers started capitalising on it too.
“Ali Baba’s core fundamental was ‘we want you to buy often, and it doesn’t have to be high value’. It was about building the habit of low cost purchases more and more often. And I think a lot of the online retailers and marketplaces here realized the shift in customer focus that’s come in the last one-two years,” he said.
Customer habits and behaviours are changing rapidly and retailers need to adapt to it now more than ever. While there are numerous categories under retail that don’t quite require a physical store, electronics, according to Panjabi, remains one where people still find the need to see, touch and feel to experience the product. Showrooming, for example, is a common practice where customers examine merchandise in a brick and mortar store but make the purchase online. However, more and more customers are now realising the shrinking price gap and preferring to complete the transaction in-store.
“Today, people want the experience of “hey let’s go pick it up over there”. I think the consumer is getting more educated and a lot of the prices are actually getting more uniform today,” he concluded.
The first two days of the 25th edition of Beautyworld Middle EastOctober 6, 2021 | By RetailME Bureau
Words by Farimah Moeini, Snapchat Head of Industry – Retail and Travel TheJuly 5, 2021 | By RetailME Bureau
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