These are the observations of Gareth Pearson, CEO of pricing specialist, BMi Research, who says that the UK’s web pricing landscape is dynamic and a sign of things to come. ‘In the UK,’ he says, ‘an estimated 9% of all retail trade is done online, so it’s no surprise these retailers have devised novel ways to drive sales using the online platform. Price comparison wields major influence over how and where consumers spend their money. A shopping giant such as ASDA has taken this into account in introducing its online Price Guarantee that allows consumers to price check their shopping bought at a rival retailer against ASDA’s prices. If ASDA is not 10% cheaper than the rival, it instantly refunds the difference in cost. That’s how competitive UK retailers are getting over price, and how they’re using this powerful differentiator to lure customers in this sustained economic downturn.’
Although e-commerce is still in its infancy in South Africa – only a handful of major retailers have fully-fledged e-commerce sites (some only place their broadsheets online), and less than an estimated 0.5% of retail trade takes place online – consumers are actively using the internet to compare prices.
‘There are at least ten million (and growing) South Africans with access to the internet, and they’re using it to look for better prices, specials and promotions,’ Gareth adds.
Massive potential exists to evolve this capability to the next level. Internationally, retailers’ e-commerce sites automatically update if a competitor’s site is found to be offering the same product at a lower price. In addition to showing price and SKU, some sites also show available stock levels, allowing consumers to make informed purchasing decisions.
This is going to be increasingly important as the South African retail sector further embraces e-tailing. ‘Local retailers may have limited web presence now, but this is changing,’ Gareth continues. ‘Retailers without e-commerce sites are realising that they’re being left behind. These outlets will eventually be under such huge pressure to make products available online that they’ll have to invest in a commerce site, because it’s just too easy for consumers to look online and find another store where they can get what they want.’