Online price competition

The online “virtual” shopping and information gathering experience is good because you can shop or find just about anything you wish from the comfort of your own home. No getting in your car, going to the mall, and then buying something that you may or may not be able to get cheaper elsewhere. Also, there is a sense of anonymity since you can do this by yourself in your home, without face-to-face time with another human (hard to fall for a sales pitch in this case ;).

On the bad side, you have to have a measure of trust that whoever you are buying from online is trustworthy. There is also a sizable illegal business by people who wish to “impersonate” trustworthy online retailers to get your credit card info and steal from you. The anonymity that you experience while online surfing is actually an illusion too, as everything you do on the web leaves a trail, and can easily be tracked to your computer’s IP address…

Monday’s E-Commerce class (8/1/2005) was about this “trustworthy” computing, and whether or not online shoppers are only looking for the lowest price? Or are they willing to pay a premium from a retailer they have developed trust in? There was a good discussion about this with varying opinions, but I think the “average” web shopper is far more trust driven than they are price driven. Personally I’d rather pay a few dollars more to be assured my purchases will be delivered on time and be what I expect. The evidence sited in class bears out this hypothesis too. One study showed: “After analysis of 105 e- retailers it was shown that price dispersion is persistent.” With the ease that an online shopper can compare prices, one would think that online pricing would be very competitive and much more homogenous. But this simply isn’t the case. I think most people (me included) look for the best price amongst sites we trust and then make our purchases based upon a variety of factors with price not being the only one (I have often paid more to get an item faster).