Prediction #3 | etailers will start competing on more than just price

Posted on August 4, 2010

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We all like a good deal, and the constituents of a good deal are a lot more than just the price.  When we shop online however, we do seem to forget that and focus solely on price.  It’s no surprise really, the Internet is the perfect place to compare, sites like Google Shopping [iPhone 4 example] allow you to compare on various different elements so that you can always find the best price.  Does that mean that there is no room for a business strategy on the internet other than cost-leadership?

This is a bit of a conundrum for brands that have ‘premium’ ambitions.  Does your product have the same cache if your supply chain includes a dodgy looking website that uses clipart to convey your carefully crafted brand message?  So, what can they do when we have a free market and you can’t easily stop people from selling your product?

Bang & Olufsen

An example of a search for a Bang & Olufsen TV

I think we’ll see far more effective and collaborative digital supply chains that allow brands to get involved in the messaging and even the service throughout the supply chain.  The reason that the etailers will let the brand get involved in their site is that through this partnership they will be able to offer a better, more credible service to their customers and of course there will most likely be a financial incentive to do so from the brand.

Will that make us, the consumers, buy from them though?  I think it will if the value is tangibly there from these ‘chosen partners’ over their cheaper counterparts.  Value will be derived in a number of ways.  It could be the experience and advice that you get through these etailers which you wont get from the ‘stack-em-high-sell-em-cheap’ brigade.  It could be the service in terms of delivery, aftercare, returns etc.  It could be the little touches that you weren’t expecting that make all the difference, or it could be tangible benefits such as a better warranty if your product is purchased from a selected reseller (the brand could argue because they’ve vetted the reseller they know the product has been handled properly and installed etc to get around the legalities).

The point is that the brands are responsible for their products throughout the supply chain.  If someone has a bad experience through an online trickster then it damages the brand.  Lots of companies are scratching their heads trying to work out how to stop price erosion (which makes their products less attractive to sell) in their market – and most of them are still arrogantly blaming the resellers for the problem when it’s their own problem!

The technologies are there for better collaboration online, for example, semantic web technology could allow brands to create truly integrated channel campaigns.  Enlightened brands could offer pre-sales support through their etailers, or intelligent and measurable offers through this framework.  There are a lot of good reasons for the brands to ensure that their premium brands are not eroded by the web and there aren’t many excuses, so maybe we’ll start seeing some more inventive strategies online which mean we won’t just be looking for the 50p difference next time we’re on the hunt for a bargain.

What might make you buy from one etailer over another?  It would be interesting to know…

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Posted in: Marketing