Multichannel Pricing Strategy

Multichannel Pricing Strategy


Personalization is permeating ecommerce in areas such as product recommendations and customer service. Personalized pricing is a fertile area of focus for multichannel retailers looking to optimize what they charge based on shifting consumer demand and competitor moves. A recent RetailWire survey suggests that offering different prices across channels will become commonplace.

Retailers have been reluctant to vary prices, concerned that they might irritate consumers who want consistent cross-channel shopping experiences. But price consistency is becoming less of an issue for consumers. Online consumers are adjusting to the idea that prices fluctuate. Smartphone shoppers in particular are aware that prices are often lower online than in-store. Rather than complain about the differences, some consumers are taking advantage of digital tools that allow them to compare prices, receive alerts when the price of a product drops and predict the best time to make a purchase. Consumers are also sophisticated enough to realize that different shopping channels offer different levels of service and that prices will vary accordingly. Currently, savvy retailers are offering uniform pricing across channels but selectively pricing channels differently based on personalization. To succeed at this strategy, retailers must be able to justify their pricing rules and be able to explain to customers why one paid more or less than another. Over time, the most sophisticated merchants will learn to leverage “Big Data,” CRM databases and other technology to offer each consumer “their own price” in real time, whether the customer is shopping on the retailer’s website, mobile site or in its store.

Current State of Multichannel Pricing

Multichannel retailers often face a challenge in deciding how to price identical products across channels. Should they offer uniform pricing as part of a consistent cross-channel customer experience? Or should they price lower online to compete against web-only retailers that have lower overhead costs?
A study from CrossView, a builder of cross-channel ecommerce solutions, examined how retailers resolved this challenge. It found that, from the average shopper’s perspective, prices for identical products were almost always the same across a retailer’s website, mobile site, stores and other channels. CrossView used mystery shoppers to evaluate the cross-channel consistency of 26 retailers on a variety of criteria, including pricing. They compared prices across the retailers’ channels for a list of popular items and found that 88% of the merchants had consistent prices in 2012, a slight decline from 2011


. ewss


Comparing Online and In-Store Prices A couple of recent studies that looked at whether prices really were lower online, confirmed the internet’s price advantage, but did note a few categories where stores were on par with the internet or even had a slight price advantage. Anthem Marketing conducted its latest biannual pricing study in June 2012, comparing prices online and in-store for a market basket of commonly purchased consumables and specialty items. Online and in-store prices were compared for a number of big box retailers, including Wal-Mart, Target, Staples, Sears, Macy’s and Walgreens, and web-only prices for Amazon and Peapod. The study excluded sales tax and shipping fees. Items priced between $15 and $45 had a clear advantage online. The average per-item price for six products in that price range was $22.39 online. That was 15.2% lower than the average in-store price of $26.41. “Considered purchases” (e.g., a GPS navigation unit, Hasbro’s Game of Scattergories, and an Apple iPod touch) also had better prices online. Items at the high end of the scale and those categorized as “convenience purchases” (e.g., Duracell AA batteries and Chapstick) did not have a clear advantage in either channel. However, school supplies were cheaper on average in-store.



In another study with a much larger sample,, the predictive shopping service, compared 2011 Cyber Monday prices online and offline for 130 popular electronics products. The study found that online prices were as much as 44% lower than in-store prices. GPS devices were the worst products to shop for in-store, as prices averaged 24% lower online. On the other hand, videogame consoles were the best products to shop for in stores, as prices were only 7% lower online.

Publish Date: October 2016

Relevant Reports

Latest Reports