Price comparison websites: the paradox of the lowest price
Phillip Stewart

This is a very interesting post. Reading it, I can’t help but wonder how sustainable and future-proof PCWs are. Do you think that the regulation options that you’ve suggested may in fact end PCW use? Or, given that PCWs increase prices for consumers, that these businesses may have a limited lifespan regardless of whether or not regulation is introduced?

With increasing numbers of retailers making all of their inventory available for online purchasing, price comparisons for a specific product among local retailers (or even international retailers) are something that can be done quite quickly and easily by a confident internet user. With the help of some good search terms, most of the work can even be done via a search engine and without having to visit each retailer’s site individually.

If a retailer is competing on price and that is essential to moving their product, I imagine that not participating on PCW and keeping their listed prices as low as possible could be an advantage. Similarly, I imagine that retailers or products that are sold at a set price or a premium price would not benefit from being listed on PCWs and would have no incentive to participate. So I cannot help but wonder — are PCWs’ days numbered? If competing on price is important for businesses, will retailers continue to pay PCW fees? Are more and more consumers just going to do the comparison work themselves?

I think if consumers see the fees that are being charged and the impact that has on prices, that could potentially start to undercut the PCW business. However, as we are well aware consumers are big fans of convenience and perhaps the ease of use of a PCW will outweigh the effort needed to do this comparison themselves. I wonder if we will see a trend towards websites more like Consumer and CNET where people can both identify key product aspects, get product recommendations and run price comparisons. Where price comparisons are only one offering together with other useful content influencing purchase decisions that consumers are about to make.

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