The age of mobile is, among other things, the age of comparison shopping. What used to be something of a project in a bygone era — being on top of all local prices for every good or service one could hope to buy — is now pretty much button-tap easy for any consumer who happens to be carrying a smartphone.
Thinking about buying a big-screen TV? Unsure if the store you're standing in is really giving you the best possible price? No problem, a Google search, entering the SKU into Amazon or using any number of apps will quickly give the average customer an extensive listing of retailers selling that exact make and model of television.
The opportunities to research for the comparison shopping-oriented consumers are many, but how much variety they actually get to see in the price is another issue entirely, noted PriceWaiter COO and Cofounder Andrew Scarbrough.
“Customers who, say, search Google for a product will see all those visual product listing ads on the right-hand box, because that is where retailers spend their advertising budget. But as a consumer, you will see a lot of the same things — and the same pricing — even if you hop across a number of those sites.”
The issue, Scarbrough told Karen Webster in a recent interview, is minimum advertised pricing.
“Minimum advertised pricing is what manufacturers put in place to preserve their brand, and it is basically sets a minimum price for which all retailers can advertise as their sale price,” Scarbrough noted.
Minimum advertised pricing does not affect what retailers can charge for their goods by and large — that, noted Scarbrough, brushes up against being antitrust-violating price fixing — but retailers don’t have a good way to advertise that they are willing to take less than that minimum advertised price, for the obvious reason.
But this is where PriceWaiter comes in to attempt to save the day.
For The Consumers — A Way To Win While Shopping
The simple idea, Scarbrough noted, is to give the consumer a better way to directly interact with the retailer and get a better deal.
Once the consumer has found the retailer’s site, PriceWaiter can essentially go to work by automating a negotiation with the consumer.
Comparison shoppers are greeted with a call to action — “buy now” or “make us an offer.”
The rules for what types of offers the retailer can and will take are preset on the back end. If the consumer falls within what the retailer is willing to offer, the deal is accepted, and the consumer gets an SMS text. If the consumer’s offer is not accepted but comes close enough, the retailer can push a text with a counteroffer, also with an SMS text.
And though the choice of SMS texting may seem, at first glance, to be a bit retro, Scarbrough noted it does have the benefit of being entirely effective in this context.
“We built the SMS functionality so consumers can get a fully automated text when their offer is either accepted or counteroffered. The reality is people are incredibly responsive to text messaging — 98 percent of texts are opened in the first five minutes they are received. Having a very simple call to action that goes directly to checkout has a huge influence on consumer behavior — 20–25 percent of those customers convert.”
However, the secret sauce, Scarbrough noted, is the “winning” aspect to the consumer that PriceWaiter lets its merchant partners offer. They didn’t just buy their good or service, after all; they managed to get the retailer to agree to give them a better price, and that is psychologically gratifying.
“There is a chance to engage privately and very efficiently that really gives the consumer a sense of power and control and then, at the end, getting that mental win that geos along with getting the price they want,” Scarbrough said.
And not just the price the consumer wants, Scarbrough noted, but also the price the retailer wants to give.
What The Merchant Gets — A Highly Customizable Platform
While the consumer gets to win on the front end, PriceWaiter is also designed to make it a winner for the retailer on the back end.
“This is all very automated,” Scarbrough told Webster. “The merchants, they can put in their minimum price, but the system also allows for a lot of factors to be added in.”
The rules are most often set to margin concerns, he noted, but merchants can and do also program specifically for certain times of the month where they offer more or less discounting or offer different parameters for different categories of goods.
“The major thing we offer is flexibility. No two retailers are ever the same, giving them the ability to use the data from our network to create and customize a negotiating platform for their needs.”
How they customize, he noted, is a matter of taste, but when they customize, the results just demonstrably get better — consumers are converting almost a third more of the time on their home sites.
And that power on the proprietary website is important, he noted, particularly as the vast, vast majority of the eCommerce players his firm works with are often selling their goods under the banner of someone else’s platform.
Amazon and similar marketplaces, he noted, offer eCommerce retailers exposure, but it comes at a price. A literal price — double-digit fees — but they also pay with a good deal of mediation in their relationship with their customers. PriceWaiter, with its back-end focus, is, among other things, an agent of disintermediation.
“We are very intentionally not a destination site like Amazon. We want to improve the retailer's own site so they can maintain the customer relationships.”
Amazon, he noted, will always have some massive advantages — most notably, its delivery network and economy of scale. But even mighty Amazon, he noted, has to obey the rules of minimum advertised pricing because, when it hasn't of late, brands have been quick to pull their goods from the marketplace.
PriceWaiter doesn’t think its client are out to topple Amazon, however. They are just looking for a meaningful way to compete without being blown out of the water by those economies of scale.
And if PriceWaiter can make it easy for them to do so, then consumers won’t be the only ones feeling like they won something at the end of a transaction.