Whether the product the same price online or offline? What is the retailers' choice

Dec. 20,2018
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“Suning Commerce” announced in June 2013 that its online products would be set at the same price as the offline ones, and implemented the promotion strategy of intra-store price comparison and network-wide price comparison. “Online-offline uniform price” is regarded by the industry as an important strategy for multi-channel integration, believed to be able to reduce the shopping link of online-offline price comparison in the process of consumers’ shopping, bringing clearer consumption experience to consumers. However, it has also brought negative effects such as a decline in gross profit margin and a drop in profits of multi-channel retailers. Online-offline uniform price can help reconcile the different channels of the same retailer and solve the issue of competition within channels. However , “online-offline uniform price” may be a higher retail price, impossible to be the lowest price, and also leading to the deviations of online specialized services. consumers’ fairness perception of prices may also influence retailers' choices.

Online-offline uniform pricing strategy of multi-channel retailers based on fairness preferencepublished on Chinese Journal of Management Science by NIU Zhiyong et al., discusses the effect of channel difference and consumers’ fairness perception of prices on the pricing strategy of multi-channel retailers from the perspective of consumers’ price fairness preference.

(1) An online-offline uniform pricing strategy may be the optimal equilibrium, if the online channel is well accepted by consumers and consumers’ fairness preference is relatively strong. (2) Consumers’ fairness preference shall play a negative role in the profit of retailers, if the online channel is not well accepted by consumers and the fairness preference does not affect the price decision of retailers. (3) The retailers that implement the integrated strategy shall get higher profits and be more motivated to adopt the online-offline pricing strategy. (4) The symmetrical fairness shall improve the profit of retailers under differential pricing strategy and lower the profit of those under the uniform price.

The author suggests that take online-offline uniform pricing strategy if there is sensitive perception of the uniform price. Secondly, it is more necessary for multi-channel retailers who implement the integrated strategy to adopt the online-offline uniform pricing strategy, which can bring higher revenues and reduce the price competition between the two channels. For enterprises that take integrated strategy as the development direction like Suning, the online-offline uniform pricing strategy shall be taken as an important strategic measure.

Corresponding Author: NIU Zhiyong
CNKI Press Officer: ZHONG Ming
Email: zm6946@cnki.net

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