Geoff Wilson / Digital Marketing / November 26th, 2007

Web Shoppers Are After One Thing: The Best Price

We are helping a small online rug store Web market their site.  Specifically, we are running a low-level Google pay-per-click campaign to generate online sales for their store.

There are several online rug stores selling the same rugs as our client, and for a while, everyone had the exact same prices.  The reason is because the distributor of the rugs tries to control the pricing by setting minimum prices that stores can sell the rugs for.

With all of the competition buying the same keywords, our client’s sales were pretty slow at first.  So our client decided to drop his prices 10-15% below the minimums for a week period to see how it would affect his sales. 

Would Web shoppers suddenly flock to his site becuase he lowered his prices?  Were Web shoppers really savvy and determined enough to click through 20 competiting Web sites to find the one with a 10% cheaper price?

The answer was a resounding YES!  Look at their sales spike in the middle of the graph, which directly corrolates to the 10-15% drop in price on their rugs.  As soon as they put their prices back to normal, sales completely dropped off again:

revenue graph

This is further proof that with online shopping, price rules!  Other factors such as site design, customer service, return policy, merchant rating, etc., are all important — but at the end of the day, price is king in e-commerce wars with heavy competition.