I've seen a couple of surveys recently which suggest that showing the prices for a competing e-commerce site is something that consumers want, and that can be beneficial for etailers.
It seems counter-intuitive, as it may lead customers straight to competing websites, but can this be a good idea for etailers, or is it just madness?
The idea behind showing other prices is that, since customers are going to shop around and check prices on other websites anyway, providing price comparison on product pages can save customers time and effort, and keep them on your site.
Also, seeing that a site is open about competitors' prices may increase trust in the eyes of the customer, though sites may have to show higher and lower prices to achieve this.
There are some surveys which suggest that customers want this, According to a survey from the e-tailing group and Winbuyer, 53% of shoppers said they would be less compelled to comparison shop elsewhere if they could see competitors' prices from product pages.
It claims that this price comparison application can increase conversions. An A/B test (pdf warning) carried out on six of the sites using the app found that average order values increased by 3.4% when customers viewed the price comparison table.
The clients of WinBuyer, at least in the UK, seem to be smaller retailers, and perhaps this price app works by adding credibility and reassuring customers that they are getting the best deal. Then again, a 3.4% increase in average order values isn't that major, unless you happen to be Amazon.
I think that any success may also depend on which retailers you are comparing your prices with. In the example above, it makes sense to compare with Amazon, as this is one site people are likely to choose instead, but if you are showcasing retailers nobody may have heard of, then the effect may not be the same.
Whether this would work for larger sites is debatable, and the only example I can think of is The Book Depository. When I talked to MD Kieron Smith last year, I asked why Amazon's prices were displayed on product pages:
It is counter-intuitive, but it works well. It shows customers that our prices are competitive compared to the biggest book retailer out there. In the online book business, you can't avoid Amazon, and customers will often visit the site to see if they can get a better price anyway, so having this on our website means that customers can see prices without having to leave the site.
This makes sense, but the company has stopped doing this now, so perhaps the strategy wasn't working so well now more people are aware of the brand, or maybe there is another reason.
There are some very good reasons why showing competitor prices may not be such a good idea though. For me, anything that distracts users on the product page is a bad idea. If customers are thinking of a purchase on your site, their attention should not be distracted by another retailer.
Also, showing this on product pages means that it could very quickly drive customers elsewhere where, even if prices are higher, they may find that delivery charges and lead times are more appealing.
This is not like offline shopping, where ASDA may show Tesco's prices next to its own on the shelves to show customers they are getting a good deal. Online, customers can go elsewhere with very little effort.
Linda Bustos from the Get Elastic blog has three compelling reasons why showing competitor prices may be a bad idea:
- Legal reasons. If you show inaccurate competitor prices, you could end up on trouble...
- Advertising the competition. Shoppers may leave your site to check out other offers and not come back.
- Risk of eroding trust. If shoppers find that your information is inaccurate, you will lose credibility. Also, if you only show competitors with higher prices, this may look suspicious to customers.
Another point to consider is that some retailers compete on more than just price, so a retailer that offers a high standard of service in terms of delivery and overall customer experience would rightly object to reducing their proposition to just a matter of price.
For example, I may find a TV cheaper elsewhere than on the John Lewis website, but I know that John Lewis offers a free five year guarantee on TVs, and has also proved to be reliable when I have bought items from them before. This is something that cannot be summed up in a simple price comparison table.
My gut feeling is that, if showing competitors' prices works at all, it is more likely to for items such as DVDs, games and smaller electrical goods where the price is all important, and it is difficult for anyone to compete with larger sites like Amazon on price anyway.
I can't see any established online retailers using this kind of feature though, as they rely more on the brand name and overall customer experience offering than simply selling at the cheapest price. I certainly wouldn't be recommending that they try this out...
I'd love to hear some more opinions on the issue - can showing competitors' prices work? Have you tried it on your site? Let me know below...