Question from Readers: Is it enough for a discounter to show the discount off list?

Image of an example of discount off list on the Jewelery and Watches website.

After viewing the video: Site Review: Online Bargain Hunting Website, a viewer sent this comment. The viewer made a good point which merits a response.

Just out of curiosity did you click on any of the products on that website home page? If you had you would have seen that it is shown what the list price is and his sale price like the Cartier womans watch you pointed out in the video

“The #1 challenge for an online discounter is to prove that you truly provide a meaningful discount.” – Ayo

List Price : $3,650.00

Our Price : $2,910.00

$740 dollars is a meaningful discount

If someone is shopping for a high end product like a watch such as Cartier they would already know what a good deal is since shopping for a watch of such a name is not an impulse purchase, like a $30 DVD player from walmart would be.
– DG

 

[Ayo’s Response]

Hi DG,

Thanks for the feedback! Those are good points.

I did see that JewelryandWatches.org shows the list price on the product page. Unfortunately, to keep the video short, I wasn’t able to talk about everything I looked at before recording it.

However, though the discount, I still felt JewelryandWatches.org should provide a more explicit comparison.

Here is my concern. As of today (March 7, 2008), if you search for “Cartier Women’s Pink Santos Demoiselle Watch” in Google you basically find that all online vendors sell this same watch for the same price, $2,910.

Since there is no easily accessible online evidence that this watch is being sold for more than $2,910 online. JewelryandWatches.org can seize the moment, by telling us who exactly is selling this watch for more than $2,910. This will clear some of the customer’s skepticism.

For example, if JaW (JewelryandWatches.org) could link us to the Cartier website and show the page on which Cartier shows the list price for this watch, that would be much more convincing.

The problem with list price, is that many list prices are artificially high. Many products are never really sold at list price. So in the customer’s mind, selling a product below list price is no longer considered a discount.

For example, when a car dealership shows the list price (MSRP) on a car, let’s say $25,000 and then shows the dealership price…say $23,000. How many of us really take the dealership discount at face value? Is the discount on list meaningful? Or is the customer more interested in the discount versus other dealerships? If all dealerships in the country are selling the car for $23,000, then this price is no longer perceived to be a discount.

Unfortunately, industries are so competitive, that we have come to expect real product prices to be below list prices. Thus, to the consumer a real discount is, not the discount from list, it is the discount below his other options.

If no other company on the web sells this watch for a higher price then $2,910 ceases to be perceived as a discount. Thus, JaW can benefit by telling the customer who exactly is more expensive than JaW’s price. It’s okay if that discount is versus a brick and mortar, JaW should just tell the consumer that. More information is better than less information.

Nevertheless, as I mention on my website the day after creating this review. If it is not possible for a company to provide a discount, it may be better to advertise another differentiator. For example, JaW’s could say, “We’ve scoured Amazon and found the best deals on Amazon for you.” Or JaW could say, “We provide a wealth of knowledge on Jewelry and Watches.” The point is that, somehow, JaW needs to get the customer to buy on their website, and whatever their selling point is, they need to really convince the customer that it is a real selling point.

Again, thanks for that feedback! I’m providing only one perspective. It’s definitely not the only perspective.

Best,
Ayo