Slashdot Mirror
Online Shoppers Naive About Online Prices
smooth wombat writes "Have you ever been shopping online and noticed the difference in prices for the same item at different stores? Do you realize that not only are the prices different from store to store but they could be different for you compared to someone else who shops at the same store? Nearly 2/3 of adult internet shoppers thought that practice was illegal according to a study (pdf format) conducted by the Annenberg Public Policy Center of the University of Pennsylvania. First-time buyers at a retailer could see higher prices than a firm's repeat customers, and retailers may not offer discounts to consumers who buy the same brands regularly without even looking at alternative products on the same site. From the article: 'The Annenberg study was based on results from a telephone survey from Feb. 8 to March 14 of 1,500 adults who said they had used the Internet within the past 30 days. The margin of sampling error was reported to be plus or minus 2.51 percentage points.'"
FTA: They are known within the industry as "bottom feeders" who don't show any brand or merchant loyalty.
The arrogance it takes for an industry to come up with this phrase is just amazing. I think I'm generally more pro-business than most Slashdot readers, and I don't even fall into that category - I'll go with a brand/merchant I've used before even if they are priced a bit higher, if I feel I got good service, because I'd rather deal with a known quantity. But the "bottom feeders" term makes me want to slap some people around.
Perhaps what's really annoying me is that companies don't want to compete and so are doing everything they can to attract their "ideal" customer while saying "screw you" to the other guys. As someone who has been ignored at car dealers on several occasions (usually because of my apparent age or because of the borrowed car I was driving that day), I find the practice of turning customers away arrogant and annoying. Changing prices only makes it worse.
If you don't like the price that something's being offered at, then you just don't have to buy it.
There's no legal obligation that car dealers have to give everybody the same lowest price that they ever sold a car for.
I'm not sure about the idea mentioned in the article that regular customers will get lower prices though - surely it should work the other way around. You get the customers landed with cheap prices and as they keep coming back you gradually tap them up until their visits start to drop off and then you start to lower them back down.
Put me in your camp -- I bought an engagement ring from a jeweler and have asked several friends of mine to at least stop by and browse because I was so happy with their service and flexibility. I went back to get some items engraved for my groomsmen, and even though they don't normally send items bought elsewhere for engraving, they sent my gifts out, got them engraved, and when I came to pick them up, was told that there wouldn't be a charge.
There's a reason that this is an old practice: it works. Let some schmoe off the street pay retail if he doesn't want to shop around. I told them up front what I'd seen elsewhere, and they decided they wanted my business enough to offer me a nicer ring at a lower price (and yes, "nicer" is my opinion -- but it was also my money).
I enjoy investing a little time to find low prices; others choose not to invest their time in price-hunting and pay a premium for their convenience.
Volume deals for corporate customers I can understand, but blatant price discrepancies just because you browse a site differently than another single customer is bad business. I don't know if I would consider it illegal, but it is definitely unethical.
Why? I'm not trying to be trite but I see no ethical dilemma here. What you are talking about economists call price discrimination and it is not only not illegal (in most cases) but I would argue it isn't unethical either. (with appropriate exceptions for things like gender or racial discrimination which are genuinely harmful) If you as a customer are willing to pay a higher asking price without any effort at negotiation or alternate sourcing, where is the ethical dilemma? No one forced you to buy from that vendor. It's not as if you can't get a perfectly adequate computer from someone other than Dell. Small businesses are generally willing to pay a different price than large businesses or home consumers. Why shouldn't Dell charge more to those willing to pay it?
Price discrimination makes many people (us Americans in particular) uncomfortable because we have deeply seated notions of "fairness". If I don't get the same price as you we seem to feel that is somehow unfair. But in reality most prices for goods and services are negotiable and we probably don't have the same williness to pay. If I'm willing to pay more for something than you are, what is unethical about someone selling to me at a higher price? Especially if I'm too lazy to look for a better deal. I'll be honest, I don't really care if an LCD monitor costs me an extra $100 if it does what I want and I can get it when I want it. You may feel differently and that's fine, but it doesn't mean I'm being screwed because I'm willing to pay more for convenience or service or even a brand.
I suspect you're seeing real-time inventory in action.
Companies in general are better customers, so it makes sense to court them. They tend to have in-house support so you have fewer clueless people calling vendor tech support. And while they may only be ordering one monitor now, they usually have a lot more to buy than the avearage home user and so getting and keeping their business is worth more.
This post written under Gentoo-linux with an SCO IP license.
"They are known within the industry as "bottom feeders" who don't show any brand or merchant loyalty."
No, lawyers and marketing dicks are the "bottom feeders." the rest of us are just trying to avoid getting screwed by both parties.
There is this one small collectibles shop I go to frequently. On average I spend a couple hundred there a month. The owner decided to start giving me an extra 10% discount since I buy so much. Sounds good to me and I'm about to drop a few hundred there tomorow. Not sure how many others get the discount, but if someone gives you enough business it can make sense to give them a little extra to keep their business and show them you appreciate them.
Fly me to the moon Let me sing among those stars Let me see what spring is like On jupiter and mars
I find the tone of this whole discussion and /.'ers reactions distateful. While price segmentation is not illegal nor unethical, not telling anyone that a site does that I believe to be unethical and may be illegal.
It's ok to have price differences among different segments of the public, such as seniors versus others, new customers versus repeat customers, etc. What is galling is that these sites don't tell you this. That means the customer doesn't have enough information to do price comparison shopping.
Our system of commerce is based on transparency. The customer has all the relevant facts so that he or she can make an informed decision. When sellers keep information secret that system breaks down.
You cannot haggle on the internet. Most sites do not have a way to offer an alternative price. So the price posted is the one you have to accept if you want to purchase from that site.
Some have said that Dell has two sites - a home user site and a small business site, and that the small business site has consistently lower prices because the two sites are essentially run by separate entities, but anyone can shop at either. Why would anyone use the home user site if that is the case? The answer is that they aren't told otherwise unless they hear it by word of mouth.
This is exactly the kind of situation that the FTC was created to police. Fairness and transparency is the only ethical way and I am not surprised that most shoppers are unaware.
Have any of you expressing surprise and outrage ever shopped in a grocery store? Let's see...
There used to be a grocery store around here that did exactly that. They stopped doing it about a year or two ago probbably because people didn't like it. I think it was more of a hassle to get the stupid card than it was anyone implying the discount card was unfair.
There's also a BIG difference between grocery loyalty cards and online price "customization". The grocery stores tell you upfront how to get the discount price, and the discount price. The online retailers don't tell you the discount price, don't tell you that someone else is getting a discount price, don't tell you how to get the discount price, and don't want to talk about the practice much at all. That adds up to a whole lot of mystery about who's getting the better prices and who's not. That can easily lead to people thinking they're the ones getting taking advantage of (price gouging). Are retailers simply trying to get as much money out of me as they can? Am I being charged more because I "look rich"? Those are the questions that go through peoples minds when they hear differenct prices are being charged to different people. No one likes getting screwed, and that's exactly what it looks like when the online retailers are secretive about this "price customization".
AccountKiller
"That's what price discrimination is"
Fuck price discrimination. Talk about other kinds of discrimination. Like charging higher prices for cosmetics, say, if a woman is buying. Or charging higher prices to teenage kids buying video games (cause they'll be pestering their parents and will often succeed). Or an $ethnic_minority_person walks into a bar and gets asked $100 for a beer. Legal, right?
Price discrimination and bidding should occur only for scarce items. If you have a Picasso to sell, fine. But if you're selling new mass-manufactured goods, price should only be a function of quantity bought. Anything else means the seller is not to be trusted. And don't talk to me about used cars - this is precisely the reason car salesmen are the butt of cruel jokes - because you can't trust them.
"Only the small secrets need to be protected. The big ones are kept secret by public incredulity." - Marshall McLuhan