Shopping on online commerce sites has increasingly grown up due to the price offs on each product. The ecommerce giant Amazon.com now as a part of change slowly eliminates to display the list prices of the products. Now, shopping in a mall or a mart is better than shopping on such sites as they will no longer let you know how much you saved on your purchase. According to the New York Times, Amazon has dropped to mention list prices in many cases.
The 21 year old US based ecommerce and cloud computing company has built its empire with great efforts and reached $107 billion annual revenue beating the Walmart. Best deals offered on Amazon attracted most and the very basic thing Amazon customer finds on this site is how much cost was reduced from the list price.
The New York Times says that the discounts on both online and offline is the new era in the online shopping which brings up many consumer lawsuits for being less than they seem. It is also happening as Amazon is shifting from an online e-commerce selling one product at a time to a full-fledged ecosystem. Amazon is putting all its efforts to make its customers buy very often as like as they breathe.
“When Amazon began 21 years ago, the strategy was to lose on every sale but make it up on volume,” stated Larry Compeau, a Clarkson University professor of consumer studies. “It was building for the future, and the future has arrived. Amazon doesn’t have to seduce customers with a deal because they’re going to buy anyway.”
Studies conducted by Mr. Larry Compeau and others claimed that the perception of a deal is the thing which makes the customer purchase in any kind of store or an e-commerce site. And Bonnie Patten, an executive director of a consumer information site, TruthInAdvertising.org said that “We’ve conditioned to buy when the things are on sale.” He also added, “As a result, what many retailers have done is make sure everything is always on sale. Which means nothing is ever on sale.”
Pricing specialists claim that the giant Amazon has started eliminating list prices from two months ago. And the statement is applied to both products sold by itself and those sold by other traders on its site.
Boomerang Commerce, a retail analytics firm’s chief executive Guru Hariharan said, “Our data suggests that list prices are going away.” The same firm amassed a list of 100 pet food products to The New York Times last spring. Amazon said that the products are being sold at a discount but only half of the products are actually sold at a discount.
“Amazon is a data-driven company with very few sacred cows,” Mr. Hariharan stated. “At the very least, it is conducting a storewide test about whether it should change its pricing strategy.”
A trader named Travis complained in the Amazon forum that the list price on his product which he did not identify had disappeared from the site. He wrote, “I’m well aware that it is bogus but it is a common marketing tactic that works very well at boosting sales.”
“The idea of all the retailers being independent is increasingly sort of quaint. They are all watching each other, and using algorithm systems to try to match each other,” says Christo Wilson, a lead researcher at Northeastern University. “If Amazon decides to raise the price of a product, it essentially becomes carte blanche for everyone else to raise their price. It’s not explicitly collusion, but it’s highly correlated.”
So, now let’s see whether this new strategy of not displaying the list prices to the customers will work out or not. If the new pricing policy of Amazon keeps its customers, it is going to continue as the top e-commerce company.