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Lisa & Terry Wellman - blog>
What's the most asked question?
18 Dec 2003
That's easy, "Why should I pay any more than the lowest price on Internet?" This question has become the central issue with millions of on-line customers and thousands of companies. Success at the product search game means bragging rights for the lowest price paid. It's all out there! Prices, Product Information, Comparison Charts and retail outlets listed in miles from my home and rated by past customers for service. I can find recommendations on which smart phone to buy, search the past history of any vehicle I desire, or get full court records on a property going into foreclosure. I can ask experts, chat with blogs and friends worldwide and ask what they would recommend. I can shop with anonymity until the final moment when I click "buy" and no salesperson will be the wiser. Some would call this Customer heaven. Customers hold the cash, can tap all the information they want and buy when, where and how they please. Most of the merchandise can be delivered in a few days by a brown truck or a red, white and blue truck. Delivered right to my door. Why would I go to a Mall with all the traffic, lousy parking and greasy fast food in a kid-packed food court? This is true for many of us. The question remains: "Why should I pay any more than the lowest price on Internet?" For many situations the answer is obviously, you shouldn't pay more if you've got a wit of intelligence and the emotional maturity to wait a few days for delivery. There is the eternal caveat, "if all things are equal." Explaining those differences is marketing in its purest form. And many companies have given little thought to developing their answers. You can tell from their websites. They are acting like the question never existed. Most companies are going to have to face up to this question. The solution probably involves a higher speed flow of models, features or time and place factors that differentiate your products from others in your market. Trying to be the low-cost supplier in a transparent market is zero sum game. Today, most analysts estimate that about 52% of US household are connected to Internet. Nielsen NetRatings estimates that the connection rate will increase at about 4% annually. Within the decade we'll pass the point where 75% of American households are connected. This means that 75% of the most affluent households will have the option of buying products at "the lowest price on Internet." As home, high traffic establishments and offices install wireless networks and the popularity of smart phones increases, the price point per connection will fall. Each time that happens a larger percentage of the population can afford the service. What happens then? Do all the Mall stores that carry near-commodity products become simply show rooms where a customer can "feel the merchandise" before they return home to order it on the Internet? Will prices "pan-cake" into a narrow range for similar products? Will there be a high wash-out rate for weaker competitors? Probably each of these questions will be realized in some form, but the extent of the trend remains in question. For sure, most companies will need a host of answers, to what may turn out to be, the question of the decade.
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