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Do online prices need to match instore prices?

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  • SuperHan
    SuperHan Posts: 2,269 Forumite
    Part of the Furniture 1,000 Posts
    The £11.99 has to cover the building you walked in to and the wages of the staff you spoke to, and maintenance of the car park you parked in. And the price ticket that was on the product. And someone had to move the product from the warehouse to the shop floor.

    Online, there are none of these overheads. It goes from the warehouse on to a lorry to you. And delivery is charged separately.

    That's why it's cheaper.
  • whatmichaelsays
    whatmichaelsays Posts: 2,927 Forumite
    Part of the Furniture Combo Breaker
    It's also worth pointing out that the OP didn't go on ASDA's website - that is a grocery website. The OP would have gone to ASDA Direct. It might sound like semantics, but they are effectively different entities.
    Hi, we’ve had to remove your signature. If you’re not sure why please read the forum rules or email the forum team if you’re still unsure - MSE ForumTeam
  • Am I the only one wondering why the op hasn't thought of this?

    Free Click and Collect
  • duchy
    duchy Posts: 19,511 Forumite
    Part of the Furniture 10,000 Posts Combo Breaker Xmas Saver!
    The point I suspect is the poster didn't want to wait.
    I do find that moneysaving is often a time v money formula.
    I can eat more cheaply if I cook from scratch - but it takes more time.
    I can get a cable at a much cheaper price but I have to wait for it to be delivered to pick up point or home rather than get it today.

    Sometimes the cash saving is worth it to me- sometimes the having it now is a need and not just a want and worth paying more for.
    I Would Rather Climb A Mountain Than Crawl Into A Hole

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  • But you can collect it the next day, surely a cable could wait just 24 hours!
  • InsideInsurance
    InsideInsurance Posts: 22,460 Forumite
    10,000 Posts Combo Breaker
    dgi_n wrote: »
    I seen a cable I need to buy on the Asda website for £3.00, so I figured that rather than waiting about for a few days I would just go and buy it from the store.

    When I got to the store I seen their price was £11.99. I asked that guy on the till to check the price and he said that they often do this to encourage more online shopping.

    What's the point in that?

    Stores dont even charge the same price within different physical stores let alone between online and offline. As long as they had different barcodes they could charge different prices within the same store if they wanted to.

    Ignore the comments about overheads, it is a red herring and really doesnt apply in the same way to companies with both physical and online distribution channels. There is the much simpler explanation of the differences in competition and if its a distress purchase or not.

    Buy ink cartridges online for your printer and they will be a fraction of the cost of buying them in store as competition is much higher. If you arent buying them online that probably means you need them urgently and so will be "willing" to pay a premium for having them today rather than waiting a few days or its an impulse buy and as such you dont bother doing your research on what the average price is.

    All companies have to balance profit per sale with number of sales. That balance is different in different circumstances as customers pricing sensitivity changes by circumstance
  • OlliesDad
    OlliesDad Posts: 1,825 Forumite

    Ignore the comments about overheads, it is a red herring and really doesnt apply in the same way to companies with both physical and online distribution channels.

    I sort of disagree with this. From experience many retailers are trying to promote online rather than instore purchases in order to reduce costs. From a single item point of view, this won't make much difference, however if a store is systematically reducing on the web vs instore prices, it will have a large effect on costs (reduced amount of staff instore etc).
  • InsideInsurance
    InsideInsurance Posts: 22,460 Forumite
    10,000 Posts Combo Breaker
    OlliesDad wrote: »
    I sort of disagree with this. From experience many retailers are trying to promote online rather than instore purchases in order to reduce costs. From a single item point of view, this won't make much difference, however if a store is systematically reducing on the web vs instore prices, it will have a large effect on costs (reduced amount of staff instore etc).

    Who is telling you the reason they are doing it? The Strategy Director or the chap in the store?

    What people think and what the truth is isnt always the same. When I worked for Tesco the official line and what was told to the store staff was that Northern Ireland stores were more expensive because of the shipping costs from the mainland to N.Ireland. The reality was that they were more expensive as there was less competition in the territory so higher costs could be supported. Most goods were sourced in ireland or had no material difference in shipping costs from eg Poland to there than from poland to england so the claim it was just cost related was totally bogus but it made logical sense and people/ staff bought it.

    The reality is that you change the operational cost rather than necessary reduce it.

    Having a physical presence you have natural passing customers and so your marketing costs are significantly lower compared to online. I set up II's Electricals on the high street and I will get customers wandering into my shop from day 1. I set up IIElectricals.com and I have to pay for Google Adwords to get short term leads and spend a lot of money on SEO and hope that I can compete with Dixons, Dabs etc.

    A lot will depend on how much you invest in automation, how your new shipping costs are handled, did you own your shops or rent them, increased costs of returns which previously you may not have allowed but the DSR means you must etc.

    There are two ways to create a price - bottom up or top down. In an ideal world you do bottom up, you price your stock, you price your running costs which you divide across your stock, you add on a margin for profit and there you have the sales price. Unfortunately if everyone else sells it for half the price you wont get any sales.

    Alternatively you have top down, you set your price based on a relativity to your competitors prices and then double check that based on the volumes you intend to sell that the price is sustainable.

    In practice more people do top down pricing online as there simply is no point trying to sell something at RRP when every single one of your competitors sell it with a 25% discount.
  • globetraveller
    globetraveller Posts: 2,249 Forumite
    Part of the Furniture Combo Breaker
    dgi_n wrote: »
    I don't understand it.

    If I want something for cheaper then I'll do everything I can to get it for that price.

    Only thing it's harming is my opinion of their company.

    I would think most companies are the same. I know that when I shop online with Tesco they occasionally have online specials. Look on it as getting a bargain by buying online.
    Prices can vary within different stores with the same company as well. I can't get the wine deals that other parts of the UK get.
    weight loss target 23lbs/49lb
  • Having a physical presence you have natural passing customers and so your marketing costs are significantly lower compared to online. I set up II's Electricals on the high street and I will get customers wandering into my shop from day 1. I set up IIElectricals.com and I have to pay for Google Adwords to get short term leads and spend a lot of money on SEO and hope that I can compete with Dixons, Dabs etc.

    I have no idea who II Electrical is which one of the reasons why they'd need to pay to get customers, many other business's will just have people type in the URL. The main fact is it is much cheaper to run and online business than a physical one, if you don't think this then why haven't Amazon gone onto the high street?
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