How are Consumers Perceiving Ecommerce Prices in the New Normal?

Posted by Moira McCormick on June 8, 2020
Moira McCormick

How Are Consumers Perceiving Ecommerce Prices In The New Normal_

Consumers predictably resent being taken advantage of during pandemics.  They may display some sympathy for the unprecedented situation that traders now find themselves in, and understand some supply-chain issues, but they definitely don't want to be fleeced.

Online demand for non-food items has increased by almost 69% since this is all began. From bulk-buying to online shopping, people are changing what, when and how they’re buying.  Home and garden, health and fitness and beauty industries have all done well during this current situation but many marketplaces have had to seriously alter their operations and online strategies - and sometimes their prices - as previous supply chains are often no longer robust enough to cope with increased demands.


In a response to the current Covid-19 pandemic, the UK’s Competition and Markets Authority has stated that it “wants to ensure that traders do not exploit the current situation to take advantage of people”. Andrea Coscelli, head of the CMA, has added that "We also remind members of the public that these obligations may apply to them too if they resell goods, for example on online marketplaces.”


Consumers may have a degree of understanding that prices for some “in demand” items may be slightly higher than in a "normal" year. These same consumers are not stupid however and can usually recognise false or misleading information that creates an impression of supply shortages and consequential inflated prices.  They read the papers, they see the news, they go on social media and they know when a trader is trying to pull a "fast one". 


Ryanair has been accused of ripping off passengers after it was found to be charging £80 more to those rebooking cancelled flights, even though it had previously offered fee-free changes. The company has now waived its change fees, but passengers still have to pay the difference if the new fare is higher. According to consumer group Which? the airline has increased the cost of those replacement flights by as much as £80. 


Following the government shutdown, Sports Direct increased the prices of some products by as much as 50%. After a consumer back lash, owner Mike Ashley issued an apology and said the company has sought to make amends by offering its entire fleet of lorries to help deliver medical equipment and supplies for the NHS. The CMA naturally wants to see "fair" pricing and for businesses to do the right thing during this time.

Has Christmas come early for Consumers this year?


In May, non-food retailers saw prices slide by 4.6 per cent, the sharpest decline since December 2006, compared to a decline of 3.7 per cent in April.  Clothing, footwear and furniture retailers in particular offered heavy discounts in an effort to attract shoppers online. “Non-food prices are likely to remain deflationary with subdued sales” says BRC Chief Executive Helen Dickinson.  Meanwhile, food inflation also slowed down, easing to a 1.5 per cent increase from 1.8 per cent in April.  Consumer spending on supermarket promotions has also been at an all-time low.


The frenzied panic buying of March/April 2020 has thankfully died down and consumers should now be seeing prices of most online core goods easing as online retailers mark down prices to maintain sales and get rid of surplus stock. In other categories however, prices could rise if there are supply shortages due to manufacturing and distribution shutdowns, particularly electronic equipment. Food prices are likely to rise as the cost of production and distribution will increase due to the required public health restrictions.


Unfortunately, many eCommerce sellers have engaged in price gouging and false marketing, prompting marketplaces like Amazon, eBay and Facebook to remove millions of items and even suspend or ban some sellers.  “There is no place for price gouging on Amazon and that’s why our teams are monitoring our store 24/7,” says an Amazon spokesperson.


As a retailer (already dealing with the headache of supply issues and having to fork out money to implement social distancing measures) you may believe that the only way to dispose of stock is to lower prices; raising prices to combat higher expenses would be extremely risky.  Here are some ways to keep your customers “on board” without resorting to heavy discounting:


  • Build up your social media strategies and engage with your customers, inviting them to become a part of your brand, share stories, experiences etc. According to a recent Nielsen’s survey, 84% of people reported trusting a social media recommendation for their future purchases.
  • Make a donation to welfare organisations or NHS
  • Have a dedicated section or page on your website to help your customers understand the reality of the situation and to explain what you are doing to help them during this time.
  • Build transparency by addressing the common consumer frustrations of delivery delays, out-of-stock products and health and safety concerns.
  • Ration the purchase of essential or most popular products per buyer.
  • Introduce time slot availability on your website to ensure smoother order processing.
  • Have a zero search “product not available” landing page with relevant recommendations for similar products. Product unavailability is on the rise but you don’t necessarily have to leave your customers empty-handed.
  • A “back in stock” notification serves as a great re-engagement strategy.


The shift from offline to online shopping means that there is scope for long term habits that will remain embedded well after this virus is a distant memory: many aspects of consumer behaviour and how they interact with brands will be changed forever.  Retailers must focus on the “customer experience” now because this will dictate how your brand is perceived when things return to normal.


One of our clients, is still operating with all of their staff working from home.  They can still answer calls and emails as normal.  Their priorities have been to deliver materials for essential infrastructure and services but are also delivering (dependent on supply) to as many other customers as possible.


So, it’s not all about price then?  Well, price is certainly not the only lever you have in your arsenal to drive customer demand; you could make changes to packaging, quality, configurations, etc.  and, if you’re seeing a demand shift towards certain product lines, you could try bundling together different options or even renaming products to better highlight their current value. 


However, 9 times out of 10 it is important that your prices stack up favourably with your competitors and there is an extremely strong correlation between those companies that are changing prices frequently, and the speed in which they are growing, and/or how much market share they hold – even during a pandemic.


Aim for Market Efficiency

This would suggest that these companies are striving for market efficiency, and are most likely investing in tools such as pricing automation, to help them achieve the right price point that intersects sweetly on the supply and demand curve.  Now is your chance to make your prices stand out from the crowd.




Topics: Ecommerce, consumers

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