Special Web deals: Proof of the digital divide or good business sense?
I RECENTLY CALLED United Airlines to book a flight. While waiting on the line, I was informed, via a recording, that the agents were prepared to offer me the "best possible fares." However, special Web-only fares might not be available to me if I purchase my tickets over the phone.
The intention of the airline came through loud and clear: "Hang up the phone and book your reservation online."
Because I was in a car in Milwaukee, I wasn't able to use the airline's Web site to buy the ticket. That was fine with me because I was more interested in getting out of town before the next snowstorm than I was in saving the company a few bucks.
A clothier I buy from -- which operates retail stores, catalogs, and an online shopping site -- often posts Web-only specials on its site. These are often closeout items that didn't make it into the latest catalog, or items that are not widely available in the company's retail stores.
Because the items are not "advertised" in the catalog or maintained as part of the company's inventory, the clothier can buy up stock as it sees fit and offer it to Web shoppers real cheap.
As a result, the inventory online is actually larger than in its catalog, and the prices are often better on these Web-only deals. So by shopping online I can obtain access to merchandise that the company cannot afford to advertise and cannot supply to all of its retail outlets.
I've heard some people suggest that Web-only discounts and special deals are yet another example of the digital divide. They ask, "Why should I pay more because I am not online?"
Here's why: Brick-and-clicks, such as electronic retailers that run physical stores as well as Web sites, can make the sale more cheaply on the Internet.
In the case of United Airlines, if I book my reservation on the Web, I don't chew up the time of a live customer service representative. Also, as with the clothier mentioned before, United can make seats available to me as they open up in real time over the Web.
Because I am able to complete the sale with fewer United Airlines resources, why shouldn't I get a discount?
Other airlines are now offering additional bonus miles if you book your ticket online. Although this is great for travelers, it's not so great for the airlines that have yet to provide Web incentives for its customers.
Clearly not all e-businesses are in the position to give Web shoppers a break or a perk, nor should they.
This rule of thumb applies mostly to brick-and-clicks -- those companies that are maintaining an online and physical infrastructure and are trying to entice customers to complete simple transactions online (where transaction costs are significantly lower).
I recognize, too, that the motivation for such moves is not purely altruistic. In the case of United Airlines, the Web reservations allow it to cut travel agents out of the supply chain, saving them a bundle of money in travel agent fees.
Consumers will continue to shop online regardless of whether or not they get some kind of deal, because they like the convenience.
But those brick-and-clicks that can offer some kind of perk for shopping online will stand out (and this must go beyond not paying sales tax on their purchase if it happens to be a taxable item).
Additionally, those companies that figure out how to use the Internett to deliver merchandise they cannot distribute via the traditional retail channel will see their sales rise.
These perks don't have to be the traditional monetary discount. They could be different kinds of perks, such as the airline that is giving people bonus miles to book tickets online.
It could be access to special merchandise. In the airline example, consumers will decide if they would rather pay a slight premium to talk to an agent -- who can help them plan a complicated travel itinerary -- or if they prefer to pop on the Web site and handle their own transaction.