The Web is a confusing place, nowhere more so than in the area of e-commerce. Even simple prices are hard to track. Someone looking for a refrigerator at US Appliance (us-appliance.com), for example, would find most prices highly competitive. Yet a Maytag MSB2154DR model costs $989 for either bisque or white. According to Maytag’s site, the list price of the bisque is $989, but the white model should be $969. “With several hundred items on our site, there may be places where we’re too high or too low,” admits co-owner Joe Nashif. The consumer, though, can’t tell good deals from bad without checking everything–defeating one of the reasons for buying online in the first place, which is to save time.
Terminology is slippery, too. Everyone understands, for example, “list” price as the manufacturer’s recommendation. But a recent Web trend has been the “estimated retail price,” presented as what you could expect to pay in a bricks-and-mortar store. That can be misleading. Look at Yale Electric (yaleelectric.com), which carries clothes dryers, among other things. A number of the units are priced high. The Whirlpool LER3624 is $279, although Whirlpool’s Web site shows a suggested retail price of $259. (Delivery charges create the difference, though this is unclear.) US Appliance sells a General Electric JE1860 microwave oven for $199 and claims that the list price is $209. GE’s own Web site, however, cites a price of $189.
Consumers can try to compare products and prices between sites, but that’s easier said than done. Product information is often so scant as to make it almost impossible to distinguish between models from the same company, let alone offerings from different vendors, according to Yager. “It’s unfortunately the nature of the business,” says Yager. “Retailers buy from many distributors, so the [consistency] in product information is unreliable.” Consumers may think they’re comparing the same product at two prices, when in fact there are major feature differences. “We’re looking at 20 to 30 sites and trying to find five [similar] items,” says Barrett Ladd, retail analyst for Gomez Advisors of Lincoln, Mass. “As you add more sites into the mix, you add more product models, and it’s almost impossible to find five items that are the exact same model packaged the exact same way.”
Comparative-shopping services that show prices at different sites for a given product can help, but they fall down when it comes to accounting for shipping and promotion expenses, finds Ladd. “If you go to sites like DealTime and Deja.com, they’re comparing the price of the product,” says Ladd.
Then there’s sleight of hand. Many retailers that buy in large volume ask a manufacturer for a slightly different product: perhaps a minor change in appearance, and generally with a new model number. “It’s to protect the pricing they have at different stores,” says Lori Mitchell-Keller, vice president of technology strategies at Manugistics Group, which makes software for manufacturing companies. “It is oftentimes that they have changed a couple of features, but for all intents and purposes the products can be very similar.”
The confusion will probably grow, warns Thomas P. Hustad, professor of marketing and Kosin Fellow at Indiana University’s Kelley School of Business. As e-commerce sites develop personalization techniques, they will be able to follow you and determine your price sensitivity. “As they know more about you, there’s nothing fundamental that keeps them from giving you a personal price list [with slightly higher prices],” says Hustad. “It’s starting with this core presumption that if we found a good deal once, we will [again] when we go back. There’s nothing written that says this has to be true.”
