Online Versus Offline Price Expectations of Indian Consumers
Abstract
The issue of online versus offline pricing is very pertinent in India, where e-commerce sites like Flipkart and Amazon are growing rapidly at the expense of some offline stores. This study examines what consumers expect in terms of prices online and offline for a wide variety of goods. The sample of 125 executives were given a questionnaire that fixed an offline product and asked them what price they would pay online for the same. Across a variety of products, consumers were very clear that they would pay less online.
Â
The results have implications for pure-play offline retailers who need to add value to their offerings to remain competitive, and also for the retailers who want to offer multiple channel options to consumers. They have to adopt a pricing strategy which will keep consumer expectations of differential (mostly lower) online prices in mind.
Â
Keywords: Online, Offline, Pricing, Expectations, Omni-channel,
References
Chatterjee, Patrali & Kumar, Archana (2016). Consumer willingness to pay across retail channels. Journal of Retailing and Consumer Services, http://dx.doi.org/10.1016/j.jretconser. Accessed 2016.01.08
Fassnacht, Martin & Unterhuber, Sebatian. (2016). Consumer response to online/offline price differentiation. Journal of Retailing and Consumer Services, 28, pp. 137-148.
Kimpel, Marko & Friedrich, Colette. (2015). The right pricing strategy for offline retailers when expanding into the online sales channel Journal of Business and Retail Management Research, Vol. 9, Issue 2, April, pp.54-67.
Lo Shao-Kang, Hsieh, Ai-Yun, & Chiu, Yu-Ping (2014). Why Expect Lower Prices Online? Empirical Examination in Online and Store-based Retailers. International Journal of Electronic Commerce Studies, Vol. 5, No.1, pp. 27-38.
Vogel, J., & Paul, M. (2015). One firm, one product, two prices: Channel-based price differentiation and customer retention. Journal of Retailing and Consumer Services, 27, 126-139.
