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Sunday, January 08, 2012

Smart application of comparison shopping


About 30 years ago, I decided to buy myself a new electric typewriter. I slogged through the snow onto the subway and traveled to an independent retailer that was running a good sale. I chose the box from a stack on the floor, paid the cashier, and headed home. When I unpacked the box, I was surprised that tucked inside was an old manual typewriter that a customer had presumably returned for a refund after buying the newer electric version.

I returned to the store and, without many questions, the customer service department took back the machine and gave me a new one in its place. (This time, they checked out the contents while I was standing there.) A hassle, but a crisis averted by a responsive customer service team.

Large signs over the customer service desk promised customers a 10 percent additional discount if they could find the same item they purchased at a lower price within 10 days of their purchase. Since the store prided itself on its low prices, it was rare to see customers taking advantage of this challenge. But when they did, it was honored.

Those were pre-smartphone days. Today, it would have been simple to scan any item's barcode in the store with any number of price comparison apps to see if the price was better elsewhere. 

This past holiday shopping season, the question arose of whether it's fair for customers to use such price-comparison apps at their local retailers. Is it wrong to use a local retailer as a way to sample products you might want to buy, but then buy your product elsewhere, including online, if you can beat the price? Is it wrong, for example, to go to the local bookseller and peruse a book at your leisure and then scan the bar code on the book to see if it can be purchased less expensively from an online bookseller?

There's nothing wrong with shopping around for the best price on a product, even if your comparison shopping is enhanced by the latest technology. Retailers may bemoan customers scanning items, but that's just smart shopping. The challenge is for retailers to remind customers the value they bring to a purchase that online retailers may not - such as not having to wait to receive their product or better customer service.

Online retailers can be just as vulnerable to the peruse-here-buy-elsewhere phenomenon. Just as a customer might buy online after examining a product in a store if the online price is better, customers could decide to download an electronic book for free from their local libraries after perusing its pages on an online booksellers' site.

The right thing is for retailers to do the best they can in providing value and service to their customers and for customers to make the smartest purchasing decisions they can. I'm not sure that personal technology would have made it easier for me to detect the wrong product was in that typewriter box 30 years ago, but it could have helped reassure me that my trek across down to get the best price was well worth the trip.

Jeffrey L. Seglin, author of The Right Thing: Conscience, Profit and Personal
Responsibility in Today's Business
and The Good, the Bad, and Your Business: Choosing Right When Ethical Dilemmas Pull You Apart, is a lecturer in public policy and director of the communications program at Harvard's Kennedy School.

Do you have ethical questions that you need answered? Send them to rightthing@comcast.net.

(c) 2012 JEFFREY L. SEGLIN. Distributed by Tribune MediaServices, Inc.

5 comments:

Dava said...

There is a difference between "peruse a book at your own leisure" and asking an independent bookseller for suggested titles or finding an elusive title that would have gone unfound via the web.

As a bookseller for 20 years in a store that strives to provide a "better than expected experience," it can be discouraging to offer my expertise and time and then have the customer purchase the book online. While I understand that offering superb service will likely encourage that shopper to become a loyal customer, it is disheartening to work so hard only to have the store used as a showroom for online purchases.

While I generally agree with your point, I believe that "peruse" in this case should be more stringently defined.

William Jacobson said...

Jeffrey,

Retailers go to substantial trouble and expense to provide customers with the right to "peruse their wares". At the point you walk in the door, retailers have paid rent, utilities, insurance, labor and inventory all of which are designed to be repaid through sales. If you purposely take advantage of these services with no intention to purchase, you rob the retailer of their investment.

If you value the services that the retailer provides and want to see them continue, then reward him with the sale, even if you end up paying a bit more. After all, you have gotten more for your money. Sales requires good faith behavior from both sides and when that breaks down, stores go under (especially in this economy) and customers will no longer be able to take advantage of services that they previously took for granted. You reap what you sow.

William Jacobson
Anaheim, CA

Anonymous said...

I buy auto parts often and always go to the same store. I needed a tie rod end and the store sold me one for $ 49 plus change. This seemed high so I checked the internet and the same one was $ 7 plus change. I called another local guy and it was $ 21 plus change.
Well this was too big a difference to ignore and I bought the $ 21 item. It was identical and probably made in the same factory in Taiwan. I wanted it right away and am unfamiliar with the internet system.
So even though I like my main supplier, I am now in a quandry.
Things are not always easy.

A

Chris MacDonald said...

It is perhaps worth pointing out that extensive and equal access to information is one of the preconditions for an efficient market. Lots of information basically means that the market can be truly competitive, and that sellers aren't relying on consumer ignorance. That implies an initial presumption in favour of information technologies like this.

donne said...

I fully agree with previous comment. Lots of information basically means that the market can be truly competitive.