According to Decide.com, which makes a price comparison app, prices on consumer electronics can be as much as 44% cheaper online than they are in brick-and-mortar stores. Though the price differentials varied from category to category, the average savings for buying something online was 16%, according to Michael Paulson, vice president of product and marketing at Decide.com.
“There’s one [thing] that drives this and it comes down to pricing transparency,” Paulson tells Marketing Daily. “And there’ more transparency on line than there is in store.”
While the company looked at prices across all categories, some products showed steeper discounts online than others. GPS devices, for instance, cost an average 24% less online. Video game consoles, on the other hand, were only discounted an average 7%.
Paulson says the difference in online discounts may come down to margins and familiarity. The margins on the high-end electronic devices such as video game consoles and tablet computers are lower than digital cameras and GPS devices, which are probably less subject to price controls. Plus, “everyone knows what an Xbox or iPad costs,” he says.
The company also evaluated geographic data and found cities such as New York, Boston and Miami had better prices overall than Chicago, Dallas and Los Angeles. “There’s a lot of competition in the New York area,” Paulson says. “It’s possibly partly a competition story and you might find there’s a tax story as well.”
Though the consumer electronics category may have a bigger differential when it comes to online and offline sales, Paulson says this holiday season is showing the beginnings of a permanent change in behavior, where people will comparison shop early and often.
“This year is the start of the empowered shopper and all shopping is going be essentially online,” Paulson says. “Everyone’s got a smartphone and the behavior is going to be to use your smartphone in store to comparison shop online.”