We have constant access to almost everything due to the internet. We are able to tell how much a sweater is at Walmart to how much it is at J.Crew to how much it is at a small boutique in Idaho. With technology giving us access to everything, companies have become very price transparent. We know how much a product is at any store in any location.
For example, a Louis Vuitton bag in Europe is significantly less than the prices in America and the only way you would know that is because of the internet and the access we have to the world. With the smart phone we have become smart consumers. Today’s customers are well informed on what they want, where they want it from, and how much they will pay for it. They go into the store knowing a lot more about the products than the consumer used to know. We used to go into the store and ask the salesperson for what we should get.
A major problem companies are facing today is showrooming. Since consumers know that they can buy a product online for a cheaper price, they go into the store to actually look at and hold the product. Companies like Walmart, Target, and Home Depot are facing this issue because Amazon has the same products for a cheaper price. Also, consumers just stay at home and do some online shopping in their pajamas and the product shows up at their door in a mere 2 days.
To combat showrooming, companies have realized that they can use their price transparency to their benefit. Since we know how much products are at other stores we choose the cheapest option. Companies are now using a Price Match Guarantee. This means that if the consumer brings in proof that the same product you are buying is cheaper at a different place, you can get it that price. This means that competition will not be based on the price of the products now because you will be able to get the same price everywhere. Now, the competition will be based on brand loyalty, convenience, preference, and experience. Companies have to set themselves apart from each other in different ways because prices will be the same.