Price comparison (alongside product research) is the most common online shopping activity worldwide. Forty-nine percent of online shoppers compare prices and research products online, far higher than the percentage that locate a store with a mobile phone or search for coupons.
But collectively, brands have a long way to go before they offer transparent and unified pricing across markets. Chanel, for example, just recently adjusted its high prices in China to avoid an even bigger price gap between the country and Europe (due to the falling Euro). And just two of the Index brands studied in the personalization report (Michael Kors and Coach) advertise prices in countries where they do not offer direct-to-consumer e-commerce. L2’s Intelligence Report: Localization report finds that brand’s divulging of pricing information tends to mirror e-commerce offerings. For example, Brazil, China, Russia, and South Korea have high rates of e-commerce sales, but few Index brands offer direct-to-consumer e-commerce in those regions. Likewise, pricing information is scarce in those regions.
Several reasons contribute to global pricing variance, among them taxes, import duties, exchange rate fluctuations, localized product assortments and different discounting strategies. Examples of pricing gaps: Women’s Calvin Klein jeans are 183% more expensive in China than in the U.S. and Lancôme mascaras are priced 90% higher in China and 62% higher in Brazil relative to the U.S. A sample of jeans across available market found that 93% of products were discounted in Brazil (highest) and 44% were discounted in Russia (lowest).
L2 emails keep you up to date on how brands are leveraging digital to grow their businesses.
Join Our EMail List