Types Of Onsite Price Comparisons
The reliability of onsite price comparisons matters not just for professionals in the retail industry, but for everyday buyers as well. After all, if you see a retailer offering what they claim to be the lowest price on the latest shiny gadget you want, how can you be sure it’s the best price? The trustworthiness of price comparisons is, furthermore, hard to prove. Subtle bias may creep in because a retailer wants to show that they have the best prices for everything.
Sometimes, even without any bias on the retailer’s part, old data may lead to inaccurate price comparisons. Given these challenges, it’s best to take on-site price comparisons with a grain of salt.
Price Comparison Sites
There are multiple forms in which price comparisons commonly exist. The first such form is the price comparison site. These are websites specifically set up to make price shopping easy, by listing products and posting the prices for them at a wide range of retailers.
General purpose price comparison sites exist, such as Bizrate and Yahoo Shopping. These sites aggregate millions of product listings. They enable shoppers to compare product prices and features across millions of merchants on the internet. Other general purpose price comparison websites include:
Niche-focused price comparison sites also exist. These are more narrowly focused on specific types of products or geography. Some examples are:
CruiseCritic - Focused on cruise ship package prices
CheapShark - Focused on digital games prices
Bring Bottle - Focused on wine prices
In-Store Price Comparisons
Some shops publish price comparisons on their own websites. This is less commonly used by retailers due to a number of factors.
According to GetElastic, many retailers are reluctant to mention their competitors or link to them. Reasons for this include the concern that they will unintentionally send customers to competitors.
In addition, there is a perception of legal risks in case the data is inaccurate. For these and other reasons, on-site price comparisons are far less commonly used by merchants themselves. In certain verticals, however, such as hotel bookings or flights, it’s not uncommon to see price quotes from competing websites during checkout.
Why Price Comparison Engines Are Likely To Be More Trusted
Price comparison engines, whether general-purpose or niche-focused, have an edge in gaining shoppers’ trust.After all, they are third parties in any price comparison between any two merchants. The merchants themselves are self-interested in the comparison of prices. A third party price comparison engine, however, does not stand to lose a sale based on who has the lower price.
As a result, price comparison engines are likely to be seen by shoppers as more reliable and impartial than merchants.
Accuracy of Price Comparisons
There are multiple possible sources of data for price comparisons. The accuracy of the data used in these comparisons has a direct impact on the shopper’s confidence in their buying decisions.
How the Data is Collected
Retailers and shopping engines that publish price comparisons typically have their own processes for collecting data.For example, Bizrate explains how it collects data for its store ratings. The company makes its data more reliable by connecting directly with shop checkout flows. When a customer checks out in a participating store, the company is able to collect data such as customer reviews of the shopping experience.
Other data available at checkout includes price relative to competitors, as well as shipping charges.
Price intelligence Apps and Widgets
Merchants do not need their own proprietary systems for collecting price data since there are commercial apps and widgets which can automate this complex task.
Price intelligence apps scan the internet and collect price data for a merchant’s selected products. The apps can also show a merchant how others are changing their prices over time in order to be more competitive for certain products.
Here at Competitor Monitor we offer a pricing intelligence solution of our own, but there are others in the market also.
Widget providers tend to focus on specific niche industries where the major players are well known. This allows tracking to be simple and easy to verify.
Accuracy of In-Store Price Matching
Another area in which the accuracy of price comparisons will matter to the end consumer is during in-store price matching.
Retailers that Match Prices
The list of stores with price matching policies is long, and includes such retail stalwarts as:
Cycles UK - Approves 90% of price match requests
Currys - Matches prices of major UK retailers
Box - Matches the online prices of reputable UK retailers
Walmart - Will match the best competitor price on one item per customer per day
Lowe’s - Promises to beat any matched competitor’s price by 10%
The Home Depot - Price matches competitors’ ads, along with giving a 10% discount
Best Buy - Price matches local competitors only
The Fine Print of Price Matching
What is accepted as a valid competitor price will depend on the store’s policies for matching prices.
For example, the price might need to be published online on the competitor’s website. Furthermore, some retailers require that the item must be available for purchase from the competitor, and must not be out of stock.
Big merchants use their own price tracking mechanisms for in-store price matching. This data may be similar to what you might get with price comparison websites, but, since it’s proprietary, it might vary at times.
Price Matching and Brand Perception
Given that honoring price matching policies plays to the benefit of a brand, retailers are eager to be seen as matching all valid purchases. This is hard to do at all times and, inevitably, some disappointed shoppers recount incidents in which they did not receive a price match even though they should have.
Can You Trust On-Site Price Comparisons?
On-site price comparisons continue to be an area of doubt for not only buyers, but retailers as well. The dilemma is, therefore, twofold. Where the buyer asks "How accurate are these price comparisons?", the retailer is just as likely to be asking, "How beneficial is it to publish these price comparisons?"
Perhaps given the obvious self-interest of merchants who do publish prices, buyers are more likely to use third party price comparisons instead. This data has fewer conflicts of interest at play and is, thus, more likely to reflect real prices charged by competing merchants.
Price comparison widgets, which may be sourced from a third party, are likely to be seen as more trustworthy as well. Customers, recognizing the value of price data, are eager to know relative prices when shopping, but tend to trust price data from disinterested third parties.