Many consumers think that online prices are different to those in physical stores. But is online shopping really cheaper than buying in store?
Alberto Cavallo, an economist at the Massachusetts Institute of Technology (MIT), has taken upon himself an international comparison of the online and in store prices charged by big retailers. He collected the price tags on more than 24,000 products online and physical stores of various retailers in 10 countries, including Australia. And… 72% of the prices were similar.
Clothing and electronics had the highest percentage of similar prices online and offline. On the other end, office supplies have the lowest share of similarity in prices online and offline.
Prof. Cavallo compared online and in-store prices in Australia, finding that 74% of prices were similar. If there’s a difference though, big retailers tend to charge higher prices online. Retailers probably expect online shoppers to be willing to pay more, or it can be for a delivery cost.
Australia’s proportion is a little higher than the US (69% similarity), but lower than in the UK and Canada (both 91% similarity).Is It Really Cheaper To Buy Online Rather Than In Store? Click To Tweet
As there is not much difference between online and offline prices, the shoppers’ decisions during online shopping should focus more on convenience, the variety of goods for sale, and speed of purchase, rather than price.
The rise of online shopping encouraged big retailers to have a single price for each product across their own stores and outlets, which benefits consumers regardless of their location. This is attributed to the way customers now have access to information on the prices being charged for products in other locations.
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