Online Batters Bricks

According to the Anthem Marketing Solution’s semiannual market basket analysis of in-store and online pricing trends for a commonly purchased bundle of consumer products, 70% of items observed have the same price online and offline. When there is a price difference, online dominates with 65% of observations favoring the online channel and 35% favoring offline. Overall, the convenience category (<$20) has shifted to an online preference. Previously 58% of observations favored the in-store channel. 

Channel Price Advantage

  • None   69.42%
  • Online               20%
  • Offline               10.58

Among those saying “Some Advantage”

  • Online               65.40%
  • Offline   34.60

In this study, 66% of observations favor the online channel. A key contributor to this change is a distinct shift in channel preference in the lowest price tier of $0-$5. Previously 61% of observations favored the in-store channel. In this study, 66% of observations favor the online channel. Online advantage for considered purchases (>$20) has decreased from 85% of observations in our previous study to 64%.

Considering the same product categories as in the previous study, men’s and women’s personal care saw significant shifts in preference favoring the Online channel. The current study shows a 94% probability of finding a product cheaper online with a 14% savings opportunity. Electronics saw a decline in online advantage, from 86% to 66% probability of finding a given product at a lower price online. The entertainment category saw a notable increase in online favor in terms of overall observations, from 50% in our previous study to 86% presently. The electronics and entertainment categories, however, show the greatest savings opportunities when a product is found cheaper in-store, at 45% and 76% respectively


  • 70% of items observed have the same price online and offline, consistent with the previous six studies
  • Online dominates where a price difference is observed with 65% of observations favoring this channel
  • The convenience category has shifted to online preference, driven primarily by a shift in the lowest price tier of $0-$5 from offline to online advantage
  • In-store savings can be exceptional when an item is found at a lower price instore

Consistent with previous studies, approximately 70% of items reviewed were found at the same price both online and offline. When there was a price difference for a specific item, 65% of observations favored the online channel and 35% favored the offline channel. This percentage favoring the online channel has been increasing over time. While the online channel leads in total observations, offline provided greater average savings when there was a price difference; the online channel averages 26% savings and the offline channel averages 32%.

When an item is found at a lower price in-store, savings can be exceptional, but it’s getting harder to find those opportunities, says the report. One example is the entertainment category: when a price difference was observed there was just a 15% chance of finding the better deal in-store. However, in those situations, average savings was a substantial 76%, suggesting it continues to pay to do price comparisons for certain categories.

Category Observations:

In the beauty category, 91% of products were found at a lower price online, with an average savings opportunity of 27%. However, offline savings opportunity has increased from 13% previously to 17% currently.

  • Average online savings   27%
  • Average offline savings   17

In the books category, 80% of observations had an online price advantage with an average savings opportunity of 21%. 76% of observations at a lower price online and 25% average online savings.

  • Average online savings   21%
  • Average offline savings   11

Beauty and books were the two categories where it was most likely to observe different prices online and offline. In the beauty category, 51% of products were observed with different prices online and offline. In the books category, 63% of items had different prices by channel.

In the electronics category, observations were split: 1/3 of the items were less expensive offline, and 2/3 were less expensive online. This is a notable shift; in the last study, 86% of items were observed with a lower price online. Online savings averaged 13%, vs. 45% for offline savings.

  • Average online savings   13%
  • Average offline savings   45

86% of items in the entertainment category were less expensive online, and 14% were less expensive offline. This also represents a significant shift from the last study, where 50% of items in this category with a lower price online, and 50% with a lower price offline. The online savings opportunity was a moderate 26%, while the offline savings opportunity was a substantial 76%.

  • Average online savings   26%
  • Average offline savings   76

In the hardware and home improvement category observations split the opposite way, with 2/3 of items found at a lower price offline, and 1/3 at a lower price online. This result is consistent with the previous study. When pricing favored the in-store channel, the savings opportunity averaged 32%. The online savings opportunity averages 24%.

  • Average online savings   24%
  • Average offline savings   32

The household items category showed no advantage for either channel in terms of total observations. This is a change from our previous study, in which 65% of observations favored the offline channel. When a product in this category was found at a lower price online, the average savings was 25%. When the product was less expensive in-store, the savings opportunity was 58%. This is significantly higher than the savings observed in our previous study, which averaged 10% in the offline channel.

  • Average online savings   25%
  • Average offline savings   58

The hardware and household items categories showed the greatest consistency in pricing across channels with 80+% of observations found at the same price in both channels (vs. an average of 70%).

The office and school supplies category offered higher savings opportunities in both the online and offline channels as compared to our previous study. Online average savings rose from 18% to 41% and offline average savings rose from 14% to 24%. Total observations, however, have remained consistent with 56% favoring online pricing (compared to 55% in our previous study).

  • Average online savings   41%
  • Average offline savings   24

The personal care category has been further broken down into four subcategories: general, kids/infants/toddlers, men, and women:

In the general personal care category, findings are consistent with previous results: 69% of items were found cheaper in-store. Savings opportunity in either channel with pricing preference was 23%. This is higher than in our previous version when both channels showed an average savings opportunity of 16%.

  • Average online savings   23%
  • Average offline savings   23

The kids/infants/toddlers personal care results are also in line with previous findings with online results having a price advantage for 80% of the items with an average savings opportunity of 17%. Offline savings opportunity was only 5%.

  • Average online savings   17%
  • Average offline savings   5

The men’s personal care category showed a big shift from our previous study in which no preference was found for either channel – either in terms of total observations or savings opportunity. We now observe a 94% probability of finding a product cheaper online with a 14% savings opportunity. Only 6% of observations favored the in-store channel with an average savings opportunity of 9%.

  • Average online savings   14%
  • Average offline savings   9

The women’s personal care category also indicated a big shift, now showing overall favor in the online channel, with 67% of products showing preferential online pricing. In our previous version we saw 67% in-store favor. In-store savings opportunity is fairly consistent with our previous version at 12% (vs. 14% previously) and online savings opportunity has increased from 6% in our last study to 19%.

  • Average online savings   9%
  • Average offline savings   12

The lowest price tier of $0-$5, which accounts for 47% of total observations, observed a dramatic tilt from offline to online favor. Previous studies showed a distinct advantage for the offline channel in this price tier. In the current study, 66% of observations favor the online channel, suggesting a dramatic change in pricing strategy among online retailers for lower-priced items. When an item was cheaper online, savings averaged 25%. When favorable pricing was found in-store, savings averaged 34%.

The price tier of $6-$20, shows a shift from a slight in-store advantage (53%) to a solid online advantage, with 65% of observations favoring the online channel. This price tier accounted for approximately 40% of total observations.

For products with an average price of $100 or more, 42% showed in-store advantage, with an average savings opportunity of 54%. 58% showed online advantage with an average savings opportunity of 15%. In the previous study, this price tier showed offline favor in 83% of observations.

Considered purchases, priced greater than $20, consistent with previous reports represent 13% of total observations. The previous study found 82% of items in this category favored the in-store channel. In this current iteration, 64% of considered purchases now have an online preference. When an item in this price tier was found cheaper offline, savings averaged 37%. When the item was found cheaper online, savings averaged 16%.

In the convenience category priced lower than $20, 66% of items showed an online price advantage with 27% average savings. 34% of items favored in-store pricing with 31% average savings. This is a shift from previous studies in which the convenience category had offered an instore advantage. In the most recent prior study, 58% of items in this price tier offered more favorable in-store pricing.

The report concludes by noting that Online is winning the price wars, forcing brick-and-mortar retailers to move to price parity in many categories, and are gaining price advantage at all price tiers. In general, says the report, in-store price comparisons (“showrooming”) as a phenomenon will fade over time as consumers become used to the idea that better pricing can be found online no matter the category or price tier. Retail stores will have to focus on immediacy and customer service to justify higher pricing, especially for commodity products with low touch and low levels of complexity.

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