E-Commerce Balancing Act: Convenience versus Cost

Some online shoppers will do anything for a deal, andsome will gladly pay extra for convenience. The trickfor an e-tailer is to find a perfect balance betweenthe two.

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

Of course, I had to be at the airport at 4 a.m., and Igot a backache carrying the books I brought to whileaway the hours during a long layover in Dallas — orwas it Minneapolis? But I’m sure I paid less thananyone 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 vanillayogurt, my friendly neighborhood health food storewent out of business and took my favorite yogurt withit. 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 GartnerG2found that 79 percent of online shoppers valueconvenience, while just 32 percent think price is important.

Of 4,400 online shoppers surveyed, 49 percentcited convenience as the only important factor inmaking a purchase over the Web. Just 2 percentsaid price was the only important consideration. Bothfactors were important for 30 percent of surveyed onlineshoppers.

Money No Object

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

Kozmo’s founders had a great idea. Where they wentwrong was in underestimating how much online shoppersare willing to pay for convenience.

For instance, when I moved to New York, I was stunnedto discover that my coworkers would order a singlebagel and coffee from a deli in our own building –and pay a tip to the delivery person — just to avoidtaking the elevator.

Many online shoppers would gladly pay extra for theconvenience 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 timeneedn’t save them money, too.

Digging for Deals

Of course, there will always be room for the hard-corebargain-hunter — the person who will drive an extrafive miles to save 2 cents per gallon on gas, or who will waitoutside a department store in freezing weather in order to befirst through the door for a blockbuster sale.

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

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

What’s more important to you when you’re shoppingonline — price or convenience? Give us your vote.

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

Note: The opinions expressed by our columnists are their own and do not necessarily reflect the views of the E-Commerce Times or its management.

1 Comment

  • Since most people probably want price AND convenience, please allow me to ask the following two questions in order to illuminate why most e-businesses can’t profitably offer both: First, presuming you subscribe to a daily newspaper, if you and your family were planning on being out of town for a few days, would you be likely to stop the delivery of your paper (or at least ask a neighbor to pick it up)? Second, presuming you answered “yes” to the first question, then for similar reasons might you also be leery about ordering goods over the Internet — goods which just might be left outside your locked front door if nobody was home?

    What’s my point? Profitably offering both price and convenience requires the selling of a large volume of goods — and your answers above prevent such a volume.

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