Price Isn’t Everything in E-Commerce

Apr 20, 2010 9:34 PM  By

With a competitor only one click away for any online retailer, one would think that a Website selling commodity products would need the lowest price in order to win the sale. But even in an economically challenging year like 2009, the lowest price wasn’t what won the sale for most online retailers.

According to research from comparison-shopping site PriceGrabber, “convenience of shopping anytime from anywhere” was the top reason for shopping online during the recent holiday season, and not any price-related reason.

And within convenience, online shoppers include attributes like service and a shopping environment that helps them feel comfortable with their purchase decision.

Online retailers can make up for the lack of physical and personal interaction possible in a brick-and-mortar store is by providing stellar service. Though good service can vary according to product niche or location, online visitors are generally looking for a pleasant shopping experience with clean and easy navigation, including the all-important shopping cart.

Online visitors also want responsive service — by phone,e-mail and/ or chat, reasonable or no shipping fees(depending on your product category), and a lenient return policy. With the socialization of online shopping, visitors will check out an online retailer’s reputation before making a purchase.

And service is really tested when something goes wrong. Did the online e-tailer provide an alternative when the requested size or color was out of stock? It can even pay to send your customers to a competitor, as long as you keep the customers satisfied.

A positive online shopping experience goes beyond customer service. Other services which help the prospective shopper make their purchase decision include product reviews, use/social recommendations, product discovery and category recommendations.

What’s more, today’s customers are also looking for an environment of fairness and transparency on the part of the online merchant. With a brick-and-mortar retailer, a customer knows who they’re dealing with. They can look the store clerk in the eye and can hold the product in their hands.

But in online retailing, the experience can’t be defined by our five senses. So customers want to feel that they’re interacting in an online retailing environment that is fair and transparent.

Beyond good service and a fair shopping environment, online retailers need to make sure that their customers feel that they’re being offered value.

If someone had told me 12 years ago that a company would grow into a multibillion dollar retailing powerhouse based on the initial business model of selling used products online, I would have laughed at them. But that’s exactly what eBay initially did.

Companies such as eBay and Amazon understood the challenges of online sales, and overcame them by focusing on good service in a fair environment, which enabled them to offer their customers value.

It’s hard to succeed by consistently charging the highest price, but if your site visitors see the value in paying more for the commodity products they purchase from your Website, you will succeed more than your lower priced competitors – guaranteed.

Eyal Keren ( is vice president-marketing for WinBuyer, a provider of onsite comparative pricing systems.