Last month I posted about the issue of showing competitors' prices on product pages as a way of increasing conversions.
I was fairly sceptical about the idea, but some of the comments left were in favour of the idea, and I have seen an example where this practice has worked and increased conversion rates.
Electrical retailer Appliances Online started trialling the display of competitors' prices on its product pages, and the initial results are positive.
The site has experienced a 14% uplift in conversion rates, as well as a 25% reduction in the number of drop-outs from product pages showing the price comparison data.
The retailer shows prices for Currys, Comet, John Lewis, Argos, Tesco and Asda, though it doesn't show competitors' prices when they are lower.
According to Appliances Online's Clare Hampshire:
We're not a big enough brand to show competing prices when they are lower, so we have to compete on price but in 90% or more cases, we are lower, and can also offer to match the deal if customers find products cheaper elsewhere.
Why showing competitor prices can work
No lower prices
Not showing prices when they are lower reduces the risk of customers heading off elsewhere for a better deal, though I do wonder whether customers will be less likely to trust the information.
Competitors shown are meaningful
I think it's more valuable to show prices from well-known retailers like John Lewis and Comet, the places people are likely to buy electricals from.
Prices are up to date
The product page shows the last time that competitors' prices were checked, and therefore the information is more reliable.
Savings are significant
In many cases, there are some decent savings to be made, which makes it more compelling for customers. If prices are about the same, or just a bit more, they may opt for more well-known retailers.
Not linking to competitors
While some of the examples I showed in my previous article showed competitor prices and also linked to their product pages, Appliances Online doesn't link out. Why make it easy for customers to leave your site for a rival?
Why it may not work
Advertising the competition
In cases where products are at similar prices, it may be the case that Appliances Online is simply alerting customers to the fact that a competitor stocks the same product. They may prefer to buy offline, or else opt for a retailer like John Lewis, which offers a free guarantee.
Trust
In the case of user reviews, showing negative and positive can reinforce the credibility of the good reviews. I wonder whether, when product pages don't contain any competitors' prices, customers will assume that it is cheaper elsewhere and leave the site to look for a better deal.
Perhaps, given that the site has a price match promise anyway, it may be better to display all prices, lower or higher.
Reader comments (6)
12:31PM on 29th March 2010
I can understand the post, but sometimes some products are expensive that your competitors, what do you do then?
4:10PM on 29th March 2010
You don't show the price Saurav.
Head of Digital at QualitySolicitors
2:44PM on 30th March 2010
Works much better when the competitor prices you display are of a bigger or at least a 'similar size' business (within your vertical) to help your own credibility. Take Asda for example; they'll target Tesco on price comparisons, whereas Tesco will likely target Sainsbury etc It also targets a segment of customer more inclined to go for price where other variables do not come into play. I decided to buy a camcorder NOT from the cheapest site but the one that gave me the best bundle deal (card, case etc). In this case it is the value which drove my decision. I'm assuming the image above is a white goods screenshot - imagine if the more expensive Argos item included a free ironing board and iron? Finally, in an age abundant in price comparisons, there's always an opportunity for quality customer experience and services to beat down the competition.
Editor at Econsultancy
6:42PM on 30th March 2010
Hi Depesh - the screenshot shows price comparison information for a washing machine.
I agree that simple price comparison alone doesn't count for everything and fails to take into account extras such as bundle deals, free guarantees and after sales support.
2:34PM on 22nd October 2010
nice article it has provided just what i need. good job!
4:59PM on 15th December 2010
What about possible trademark actions? Tesco is a trademark, so is there a danger their legal team might decide they don't want their trademark displayed on a competitor's website?
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