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Divergence in Pricing Online vs. In-Store

Posted on 6.20.2011

In a follow-up to its 2010 study on online versus in-store pricing, Anthem Marketing Solutions today released a report showing that items with prices below $15 were generally cheaper in store, while those priced above $15 were generally cheaper online. As the brick-and-mortar and pure-play Web worlds increasingly intersect, this information can prove useful

The data reflects a divergence from the Fall 2010 study according to Anthem, which found that items below $50 were often cheaper in-store, where as those above $90 were more commonly priced lower online. Anthem’s recent study still concluded that an item’s price tier, category, complexity and usage type actually better predicts which channel will have the lower price.

Understanding the forces driving consumer behavior is critical for optimizing channel pricing. “In order to ensure profitability, more enticing and convenient shipping deals need to be enacted for these lower priced goods to compete with the immediacy of in-store purchases, and fewer items being delivered to physical stores could allow for re-allocation of profits to shipping companies, warehouses, and manufacturers,” according to the official statement.

“Physical stores may also see a benefit of increasing the online profitability of low-priced items, as fixed costs may be lessened due to a reduced need for store space as well as an increased focus on only stocking items that are most likely to be purchased in-store, such as convenience goods.”

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