Consumer Insights

DSW Lawsuit Shows Sea-Change In Shoppers’ Pricing Expectations

What are the biggest ways digital commerce has changed retail? Logistics certainly move at a speed that was formerly unthinkable without the aid of computers and automation, but what if the long-lasting effects of the digital revolution in retail have less to do with the technical and more to do with the mental effects of transparent pricing?

That could be what Designer Shoe Warehouse is in the lengthy legal process of realizing.

Law360 reported that DSW presented its initial arguments on Friday (Feb. 12) in a lawsuit filed by two customers alleging the retailer of intentional deceptive pricing strategies. Though the plaintiff’s claim that DSW’s “Compare to…” pricing displays did not provide accurate or even relevant information on what products or purchases shoppers were being instructed to compare DSW’s prices to, the retailer argued in court that the filing does not satisfy the minimum need for detailed information to be recognized by the court.

“Plaintiffs claim that a reasonable consumer would interpret the phrase ‘compare at’ as a former price comparison,” DSW said, via Law360. “The [first amended complaint] does not identify any representation by DSW that would cause a consumer to reach this conclusion, and plaintiffs offer no explanation as to why a consumer would believe this.”

DSW’s arguments were part of a filing to dismiss the claims and the suit, though the retailer also asked the presiding court to issue an injunction against further legal action on pricing in any of the 40 states it operates in. One might be tempted to fall into a “the lady doth protest too much” mentality in response to DSW’s unwillingness to move forward in court, but if that is the retailer’s desired direction, it could be worse news for its shareholders than its customers.

If the retail industry is moving toward anything, it’s greater pricing transparency, not DSW’s borderline anti-consumer stance on free and open dialogue on discounts and such. The digital retail revolution has ushered in a new type of hyper-conscious consumer who isn’t afraid to hunt for the best deals, and this has led to a new set of expectations that retailers like DSW are finding difficult to meet. In fact, an Accenture survey on the 2015 year in retail found that 42 percent of customers are routinely dissatisfied with the pricing information available for their preferred products.

Customers grumbling discontentedly is one thing, but if retailers continue to resist their demands for greater pricing transparency without consequences, it’s hard to believe anything will change in major ways. However, the first cracks in the levee appear to be spreading. According to Daily Business Review, the federal court recently ruled on a case between Michael Kors and a group of shoppers for misleading prices at the brand outlet stores. Jeff Ostrow, Florida-based class counsel, told DBR that while it’s only one decision, the ruling could give critical momentum to a building sentiment of change within the consumer community.

“We’ve got seven or eight cases that are similar out there against other retailers that have outlets, and this is the first settlement of its kind,” Ostrow told DBR. “I believe it’s going to change the entire industry, where all of these retailers are ultimately going to go with a fair pricing scheme.”

It might be a bitter pill to swallow for brick-and-mortar retailers still struggling with the transition to razor-thin profit margins, but if customers have already embraced an idea of how they deserve to be treated by retailers — fairly, openly and with all the relevant information, good and bad, upfront and visible — it’s less likely that they’ll give up on that idea than it is seeing retailers fold their hand and take what sales they can get rather than the alternative of none at all.


Exclusive PYMNTS Study: 

The Future Of Unattended Retail Report: Vending As The New Contextual Commerce, a PYMNTS and USA Technologies collaboration, details the findings from a survey of 2,325 U.S. consumers about their experiences with shopping via unattended retail channels and their interest in using them going forward.