When’s the last time you shopped for a hard drive?
They all come in similar looking boxes, and the specs are meaningless to the average user. So if you’re like me, you relied on the brand name as a surrogate for quality.
Today, I just Google “What hard drive should I buy?” and get a referral to a blog post on Backblaze, which tested 20,000 hard drives from the top three brands over a five-year period. Brand A ($200) lasted 97% of the time; Brand B ($130) lasted 95%; and Brand C ($110) lasted 75% of the time. With links to purchase on Amazon and other retailers, I can just click Brand B and I’m done. The brands reputation plays no part in my decision; I care about third-party verification and convenience.
That simple notion changes everything in retail. Increasingly, consumers expect perfect information. They don’t trust brands’ claims, and they insist on seeing the real data. This extends beyond the simple social proof of user reviews to every aspect of delivery, and will force retailers to stop trying to trick consumers with cross-channel inconsistencies.
If I’m shopping for a Weber grill, I can’t compare models from Home Depot and Loew’s because they have (purposefully) unique model numbers. Similarly, Walmart’s Savings Catcher price matching service won’t match price with Walmart’s own website.
That’s by design. Price obfuscation is an old retail trick that counted on the customer knowing only what the retailer told them. But today’s customer has perfect transparency about every item she might want to buy. Third-party websites tell her the best time and place to get a good deal. Before she goes to IKEA to get a floor lamp, she’s checking the site to see how many pieces the store has in stock and how many the supply chain will deliver each of the next four days. Then she’s going on Amazon to buy a sweater for $109, and before she can press buy, she gets a notice that the price went up by $3, asking if she still wants it.
And then she’s going on Meh.com to see the Roomba vacuum cleaner they’re selling that day for $99. Beneath the buy button, she finds the stats and sees she’s the 46,000th person to view it, 6,300 people have bought so far, and 92% of viewers have come from Slickdeals.com.
Every retailer in America has this level of information. Most won’t share it with customers for fear they won’t buy something that’s unpopular. Here’s the thing: Customers are going to find out anyway if the vacuum cleaner’s lousy or the price is too high. If you’re the source of reliable information, they’ll trust you. They may not buy today, but they will tomorrow. If you’re keeping it secret, they’ll never buy from you again.
We used to trust in brands. Now we trust in data. The more we do, the more we expect it. With nowhere to hide, retailers need abandon the old tactics of obfuscation and embrace radical transparency. Only through openness can retailers earn trust that leads to customer lifetime value.