Researchers compare multiple categories of shoppers and find the linchpin:
It's commonly assumed that the supply-and-demand economics of the consumer marketplace dictates price. If you are one of few retailers that sells a product consumers want, you can charge more. Or, if supplies of that product are more scarce, again, prices will likely be higher. On the flip side, if supplies are plentiful for a product that is in less demand, prices for that product are likely to be lower.
But researchers have found it's not always that simple. Thanks to the internet and e-commerce, more consumers have taken advantage of going to a physical store to inspect items before purchase, leaving that store, and then purchasing the product at a lower price elsewhere. This is called "showrooming."
This has led to several assumptions in the retail industry, from the thought that showrooming will put brick-and-mortar retailers out of business, to the notion that the showrooming trend has driven prices down across the board. A new study has found these may both be false.
[...] "Showroomers do their research in advance," says Bar-Isaac. "They know what they want, they already know what that retailer may charge, and they go to stores with more limited or shallow selections in search of a better price."
[...] "Through our research and our models, we contrast three varieties of retailers, relevant when consumers are initially uncertain as to which is the best fit," says Bar-Isaac. "The first is a retailer that offers more choice through a deeper selection. The second is the retailer that offers less choice, or a more shallow selection. Alternatively, an online channel may provide little opportunity to assess fit, even if there is a deep selection."
The researchers found that the first type of retailers, those with deeper selections, tend to hold to higher prices because they know that once a consumer enters the store, they will likely find the best fit and make a purchase.
This means that the one consumer most likely to actually influence price is the not-so-choosy consumer who starts off by visiting a shallow store and expect that they will make a purchase once they get there, as long as they can find a sufficient fit. If they don't find an acceptable fit, they will move on.
"This group of consumers is the only one in the economy that compares prices," adds Bar-Isaac. "The size of this group is large enough that it plays a key role in price determination."
[...] "Still, most consumers are not as likely to search more than one store to look for the perfect match and a lower price," says Bar-Isaac. "This helps ensure that stores we have dubbed 'shallow' are more likely to sell a higher volume of a given product at a more competitive price, while stores we've dubbed 'deep' are more likely to sell their products at a higher price, oftentimes to more selective consumers."
(Score: 5, Interesting) by rpnx on Friday April 14, @08:46PM (14 children)
Although I don't usually compare prices when shopping, I typically recognize the prices/quality over time, which often influences which store I walk into. If a store keeps selling expensive/overpriced products, then I will stop frequenting the entire store, not just ignore one item on the shelf. An example of a store I don't visit is Target. I usually go to Walmart or Aldi first and only go to Kroger or Publix if I don't find what I am looking for there. I simply know, by experience, that I save money on average at Aldi. I don't compare individual items, but I do compare the store as a whole. That's because comparing prices across multiple stores would require me to make trips to multiple stores, which is a large time investment. Perhaps I am atypical though.
Of course, if I find the right product, I am more willing to spend more money on it. That's true, but typically of products that demand quality, like tools and tech products.
(Score: 2) by krishnoid on Friday April 14, @09:51PM (4 children)
That's very true for durables, rather than for disposables/consumables, or things selected more for (possibly time-limited) cosmetic/aesthetic value. Maybe ask people who assemble their clothing styles, and see how their purchasing profiles differ from yours.
(Score: 4, Interesting) by JoeMerchant on Friday April 14, @10:26PM (3 children)
>ask people who assemble their clothing styles
In the late 1980s, I lived in Miami and shopped in Dadeland Mall - which was "a big deal" back then. The Dadeland Burdines had actual "buyers" who would travel to New York, Paris, etc. to view the coming fashion trends and use that to inform what they would be stocking their departments with in the coming months. While the Miami stores weren't as "up to the minute" as New York or Paris, they were 6 to 18 months ahead of "backwater" towns like Tampa, Fort Myers, etc.
And why does this matter? To me, it didn't - but... since I was shopping in Miami, I'd see stuff I liked, I'd buy it, and I'd wear it. Months later, I'd go home to the "backwater" town, and people would see me wearing things that either had just hit the stores very recently, or often they'd see me wearing things that wouldn't be in their local stores until a few months later. A few mentioned this to me over the years, questions like "is that a new shirt?" to which I'd answer something like "I guess, I think I bought it last September." And I guess it's an important thing to a lot of people. Personally, I'd rather have clothing that lasts 10-15 years and not worry about what people are seeing on mannequins in the mall. Do people still go to malls? I mean, sometimes I see crowds in mall parking lots - I guess that means somebody must be shopping there...
Україна досі не є частиною Росії Слава Україні🌻 https://news.stanford.edu/2023/02/17/will-russia-ukraine-war-end
(Score: 3, Funny) by Anonymous Coward on Friday April 14, @10:42PM (1 child)
So did you dress like Tubbs or Crockett?
(Score: 2) by JoeMerchant on Saturday April 15, @12:43AM
I did have one Crockett jacket and shirt but they were for themed parties only ...
Україна досі не є частиною Росії Слава Україні🌻 https://news.stanford.edu/2023/02/17/will-russia-ukraine-war-end
(Score: 3, Interesting) by krishnoid on Friday April 14, @11:32PM
Wow, I guess the percolation of fashion trends really is a real thing [youtu.be]. From prototype to alpha test to early adopters through mainstream and legacy, the progress of adoption [youtu.be] seems to have parallels in multiple fields.
(Score: 5, Interesting) by JoeMerchant on Friday April 14, @10:01PM (5 children)
I find that consumers are mostly creatures of habit, and also social status seeking lemmings, something that the Publix supermarket chain seems to have exploited to the fullest.
My clearest example of such was one night, having circled the Publix parking lot twice and finding no open spaces, and only needing a few items anyway, I went across the street to the Winn Dixie grocery (used to be the dominant chain in Florida before Publix ravaged their markets). I parked right by the entrance/exit doors, walked in to a somewhat sadly empty looking store with dated looking red-white decor instead of the "fresh" green-white decor across the street, got my items of basically the same quality for basically the same prices as across the street, walked right to the single bored looking checkout attendant and was on my way before I would have found an open parking spot across the street - long before I could have fought my way through the crowds and waited in line for checkout.
But, that's the failing: Nobody wants "to be seen" at that dingy, sad old store across the street, they want to be where the action is! After all, with this much of a crowd, it must be a much better place, right? Yes, people actually make many decisions like that.
When visiting Israel, we stopped in a restaurant a bit before lunch time - the place was empty, but our guide knew they had good food/service/ambiance, so we stopped and ordered lunch. The owner made a big deal of us being the first customers of the lunch shift at such a good time because we "broke the ice" for them - visibly sitting on the patio table we "influenced" many other groups to stop and have lunch there as well. I think we were comped free appetizers or something similar in gratitude for being that first table of guests to stop. It might also have been because we parked a nice, expensive, large, clean car out front - giving the place a bit more "class" than perhaps some of the more common cars on the road would have. This is nothing about the quality or value of the food or service, it's all about the perception of people whether they, too, want to spend their money and time in a place - and so many people make those decisions based on their perceptions of what other people are thinking / doing, rather than anything of actual substance.
Even in December of 1979, I was in 8th grade, and a classmate brought a copy of the new Pink Floyd album "The Wall" to school for some pre-vacation free time listening. I think he only got to play about 45 seconds of "Another Brick in the Wall part 2", but just from his enthusiasm for the song, nothing about the song or lyrics themselves, I could tell: this song was going to be a huge hit - as it was, because that's largely how such things happen: groupthink.
Україна досі не є частиною Росії Слава Україні🌻 https://news.stanford.edu/2023/02/17/will-russia-ukraine-war-end
(Score: 1, Disagree) by khallow on Friday April 14, @10:50PM (4 children)
Cleanliness is not superficial. A store and brand that can't be bothered to look good and clean will cut corners in other ways.
That might explain it being a huge hit in 1979. What explains it continuing as a huge hit now? Groupthink doesn't last four decades.
(Score: 0) by Anonymous Coward on Friday April 14, @11:00PM (1 child)
Is it a huge hit now? I don't think I've heard it outside of a school setting in many decades. Middle school students have always loved it because they get a taste of rebelliousness when singing the chorus.
(Score: 2, Funny) by Anonymous Coward on Friday April 14, @11:42PM
> Is it a huge hit now?
A few years ago, "All in all you're just another prick with no wall." gave it a nice bump.
(Score: 3, Funny) by Azuma Hazuki on Saturday April 15, @03:27AM (1 child)
> Groupthink doesn't last 4 decades
Oh, you sweet summer child...
I am "that girl" your mother warned you about...
(Score: 1) by khallow on Saturday April 15, @04:28AM
This is music. It typically has a half-life of a year. Groupthink really doesn't last 40 years in the industry.
(Score: 3, Insightful) by istartedi on Friday April 14, @10:26PM (1 child)
I used to turn up my nose at Wal Mart. Then Dollar General came to town. I'll drive 20 miles to Wal Mart before I go to DG. Before that, it was K-Mart which also brought me past the county seat; but they're out of business... the K-mart, not the county. Their building is supposed to turn in to a Tractor Supply store soon, which is cool but I generally used K-mart for socks, underwear, jeans, and occasional plants or Christmas decoration. That's not really Tractor Supply stuff, unless you want really rugged gear that tends to be more pricey, like work gloves. Those are worth buying at Tractor Supply; but the other stuff I get cheap from Amazon mostly.
That's what'll always get me in to a store: stuff where the sizing isn't straightforward. If you know your measurements on name brand apparel, you're usually going to get a fit, so it's not a hassle to do online; but you really want to try on gloves in the store. Same deal with shoes. I lucked out ordering them online during the pandemic; but I'll be going back to the store next time. A salesman right there will even bring you out another pair of the same size and style if you don't get a fit, just in case there was a mistake. What takes minutes to get right in a store takes days of annoyance by mail, and the store doesn't even cost that much more.
Appended to the end of comments you post. Max: 120 chars.
(Score: 2) by Reziac on Saturday April 15, @06:48AM
We have a Tractor Supply here. In the range of clothing and boots they carry, most are significantly cheaper than anywhere else. Of course, it is geared toward work clothes, lots of Carhartts and barn boots, Work gloves are cheaper bulk at Costco (and if I don't have six pair in the closet, I'm out.)
Excellent point on fit. Most things we wear aren't generic enough in fit and comfort to buy without a hands-on first. At least not if you're fussy about it, good point about shoe salesmen!
And there is no Alkibiades to come back and save us from ourselves.
(Score: 2) by Reziac on Saturday April 15, @06:39AM
That's pretty much how I shop. It's not really productive to compare individual items, but a storewide trend is noticeable, at least for the things I buy. And sometimes it's not worth the time/gas cost to go to the cheaper but distant or inconvenient store. Winco can usually overall beat Walmart, but Walmart is one mile away, has a more consistent selection, is super-convenient, and has a lot of other things I need, while Winco is a 30 mile round trip, groceries only, and a bitch to get in and out of. And if I'm already in that area I probably hit Costco first, and then I'm done shopping for the day cuz it's not worth another bout of traffic for the two things I can only get at Winco.
And there are a few things where I don't compare prices because quality is consistent at Store X, but all over the place everywhere else. So I'll eat whatever the price diff is and buy from Store X.
And there is no Alkibiades to come back and save us from ourselves.
(Score: 2) by krishnoid on Friday April 14, @11:57PM (3 children)
Looking at the deep analyses below, I wonder if engineers do well financially and when shopping by applying their skills to the typical tasks in their day-to-day life which have clearly visible quantitative elements. They take a short mental break from deep, complex work, walk around a store, and analyze simpler, more concrete environments to within a centimeter of their life while spinning down.
After a few passes, you can significantly optimize money, fitness for purpose [youtu.be], and reliability in the average consumer situation to stretch your buck, almost automatically.
(Score: 0) by Anonymous Coward on Saturday April 15, @02:49AM
> After a few passes, you can significantly optimize money,
Yeah, buy used. Craigslist and thrift shops cover a large part of what I buy (but I don't buy that much anymore).
(Score: 3, Funny) by driverless on Saturday April 15, @06:03AM (1 child)
Nope. XKCD explains why [explainxkcd.com].
(Score: 2) by krishnoid on Saturday April 15, @04:49PM
True, true, just make sure you treat them like fissionable material [youtu.be].
(Score: 1, Interesting) by Anonymous Coward on Saturday April 15, @03:44AM
I've been to a shop and asked for a price BETWEEN the online price and the shop's list price.
Initially on seeing me show the online price the sales guy thought I was asking for the online price and got upset. But I managed to get him to understand that I wasn't asking for the online price but something in between (and actually on the higher side).
So in the end we agreed on a price, I'm sure they still made money from that, I got a cheaper price AND got the item faster.
The shop doesn't have to change their listed price though - so they can still make more money from those who don't do what I did.