E-Commerce Balancing Act: Convenience versus Cost

I fall somewhere between the two camps, as I suspect most online shoppers do. I have used Priceline.com (Nasdaq: PCLN) and its competitor Hotwire to get, if I may say so, fabulous deals on airline tickets.

Of course, I had to be at the airport at 4 a.m., and I got a backache carrying the books I brought to while away the hours during a long layover in Dallas -- or was it Minneapolis? But I'm sure I paid less than anyone else on my flight.

On the other hand, I also have turned to the Internet when it seemed like the best way to find what I needed, regardless of cost.

After shamelessly getting me hooked on organic vanilla yogurt, my friendly neighborhood health food store went out of business and took my favorite yogurt with it. I plan to order a case on the Web if I can find it, and I don't care if it costs three times as much as the store charged -- I want my yogurt.

Convenience Trumps Price

But convenience and cost are not equally important in the eyes of online shoppers.

A recent survey by GartnerG2 found that 79 percent of online shoppers value convenience, while just 32 percent think price is important.

Of 4,400 online shoppers surveyed, 49 percent cited convenience as the only important factor in making a purchase over the Web. Just 2 percent said price was the only important consideration. Both factors were important for 30 percent of surveyed online shoppers.

Money No Object

If convenience is so important, and if online shoppers are more concerned about using the Internet to simplify their lives than to save a few dollars, why don't more e-tailers follow the lead of Kozmo, the ill-fated online delivery service?

Kozmo's founders had a great idea. Where they went wrong was in underestimating how much online shoppers are willing to pay for convenience.

For instance, when I moved to New York, I was stunned to discover that my coworkers would order a single bagel and coffee from a deli in our own building -- and pay a tip to the delivery person -- just to avoid taking the elevator.

Many online shoppers would gladly pay extra for the convenience of shopping from home, away from weather and crowds. They also would shell out money to have hard-to-find favorite items delivered to their door. After all, time is money, and a site that saves people time needn't save them money, too.

Digging for Deals

Of course, there will always be room for the hard-core bargain-hunter -- the person who will drive an extra five miles to save 2 cents per gallon on gas, or who will wait outside a department store in freezing weather in order to be first through the door for a blockbuster sale.

Sites like Priceline have found a way to capitalize on that single-minded desire for savings.

In an ideal online world, a site would offer both cost savings and convenience, but there is room for sites that focus on just one or the other.

What's more important to you when you're shopping online -- price or convenience? Give us your vote.

What do you think? Let's talk about it.