Consumers Pay Up to 44 Pct More Offline?

For the last several years, consumers have gotten the sense that they can save a little money by shopping online for many types of goods, rather than going to traditional brick-and-mortar retailers and taking their chances with on-hand selection and getting door-dinged in the chaotic parking lots. Now, figures released my online merchant services firm Vendio claim to back up that idea, finding that consumers can spend as much as 44 percent more for consumer electronics products from offline sources when compared to purchasing online.

In its “study”—and we’re quoting that term because that’s what Vendio called it!—Vendio picked out a dozen or so popular consumer electronics products (list below) and then used its Dealio shopping comparison toolbar to ferret out the lowest prices available from online merchants. The Dealio toolbar claims to be able to rummage through reported inventories from more than 100,000 online merchants an eBay sellers for availability and pricing information. Vendio then called up five offline retailers—including some large consumer electronics chains—and averaged their prices for the same goods to come up with an “offline” price.

Vendio’s conclusion? For popular consumer electronics items, consumers pay average of 44.2 percent more at local retail outlines than they do online. Vendio’s caveats? The prices looked up via Dealio including sales tax and shipping and handling, while brick-and-mortar prices only include an 8.25 percent California sales tax.

“For consumer electronics, there are tremendous price gaps between traditional brick-and-mortar stores and online retailers,” said Rodrigo Sales, Vendio CEO and co-founder. “This holiday shopping season, brick-and-mortar stores will garner more last-minute sales because of gift giving deadlines. Our survey shows, however, that consumers can save money by planning their shopping earlier and making purchases online. With tools like the Dealio comparison shopping Toolbar, consumers can make these purchases in less time, and with far less hassle than fighting the crowds at the mall.”

Leaving aside the issue that the methodology of Vendio’s “study” isn’t exactly the stuff of which robust market research is made (handpicked products, tiny number of offline vendors, no information at all about Dealio’s data, comparing “lowest” prices to “average” prices, etc.), there’s little doubt that the online world often offers competitive and even stunningly good prices on a variety of goods and services. If it didn’t, the world wouldn’t have little companies like to kick around.

We’re also sure a number of the 100,000-plus merchants whose inventory information is assessed via the Dealio toolbar are upright entrepreneurs who stand behind their products, do everything they can to keep overhead down, and offer wonderful customer service.

And we’re pretty sure somewhere, amongst Chuck P.’s Web Emporium and Millard’s eBay Shop ‘o Horrors…some are not.

If consumers don’t care very much about the provenance of the goods they’re buying, it’s not very difficult to find prices in the offline world substantially lower than those offered through major retailers. Some of these goods are excess inventory, factory recalls, or refurbished gear offered by reputable retailers will full warranty and service; similarly, some items are demos, scratch-and-dent, lay-away leftovers, or used items offered on an as-is basis by upstanding businesses. Heck, some will be sold as loss leaders to get customers into stores during the critical end-of-year holiday buying season.

But some of it will be grey market merchandise—perhaps imported without the manufacturer’s knowledge or consent—”missing” inventory, or even stolen property.

The bottom line is that if a deal seems to good to be true, it probably is—no matter what a browser toolbar may say.

Vendio’s Price Comparison “Study”

Canon PowerShot SD550 digital camera
Lowest online price: $248; Avg. offline price: $324.74
Canon A530 digital camera
Lowest online price: $129.53; Avg. offline price: $180.05
HP M425 digital camera
Lowest online price: $103.95; Avg. offline price: $146.13
Kodak Easyshare C643 digital camera
Lowest online price: $140.95; Avg. offline price: 248.25
Kodak Easyshare Z650 digital camera
Lowest online price: $227; Avg. offline price: $297.14
Xbox 360 video game console
Lowest online price: $399; Avg. offline price: $432.99
Samsung HD860 DVD player
Lowest online price: $89.98; Avg. offline price: $107.16
Panasonic TH-42PX60U 42-inch Plasma TV
Lowest online price: $1,522.95; Avg. offline price: $1,984.58
Samsung LN-S3241D 32-inch LCD TV
Lowest online price: $969; Avg. offline price: $1,457.40
Pioneer PDP-4270HD 42-inch Plasma TV
Lowest online price: $1,974; Avg. offline price: $2,922.74

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