With a new pair of shoes or a shipment of groceries just a few clicks away, American consumers have embraced the ease of online shopping. In fact, on average, Americans were expected to spend an estimated $1,804 on online shopping last year (the most of any country in the world), according to Statista's Digital Market Outlook for 2015.
But just because online shopping is easy with 24/7 access to e-commerce sites and no lines at the checkout doesn't mean that it's your best or least expensive option. Here's a look at the potential downsides of shopping online, as well as strategies for offsetting these challenges.
Many retailers offer free shipping, but often with a minimum dollar amount designed to tempt you into buying more. In fact, Amazon.com recently raised its free shipping minimum for most orders to $49. "If you end up buying a bunch more and adding some filler to your order, [it] may not turn out to be the best deal," says Karl Quist, president of online shopping tool PriceBlink.com. If you decide to shop online anyway, search for a promo code and see if you can nix the shipping costs without buying more than you need. Programs like ShopRunner or Amazon Prime also offer free shipping with no minimums, but be sure to weigh the cost of membership against the total savings.
Potential for overpaying.
Online retailers' use of dynamic pricing means thatprices for online purchases can fluctuate over the course of the day. "If you buy it at the wrong time, you could be overpaying," says consumer and money-saving expert Andrea Woroch. "It's a lot harder to change prices at a brick-and-mortar store than it is online," Woroch adds. Fortunately, tools like Paribus.co will monitor price drops and automatically request a refund on your behalf. However, a study conducted by Northeastern University also found that some e-commerce sites use "price steering," a technique to manipulate search results or customize pricing options based on data collected about the user. For example, if an e-commerce site detects that a consumer is more affluent, it might steer the consumer to personalized and pricier options.
Maybe you don't need new shoes, but you get an email from your favorite retailer offering half off a second pair. Or just as you're about to close your Web browser, the chat box pops up offering you 10 percent off your next purchase. Now, instead of thinking you don't really need another pair of shoes, you're thinking about what a deal it is. Online retailers are savvy about getting you to spend more. To curb impulse buys, Woroch recommends disabling a one-click checkout option and not saving your credit card information, both of which make it easy to buy items without a second thought. And instead of shopping on your phone when you're intoxicated or bored, find other ways to keep yourself occupied. "With shopping so readily available all the time, you have that much more time to shop and spend money," she adds. Another strategy is to unsubscribe from retailer's emails or to create a separate email account. That way, you won't be tempted to buy things you don't need.
Lack of real-world touch and sight.
Some online retailers such as Warby Parker and Trunk Club use home try-ons or advanced fit technology (like Fits.me) to help you buy exactly what you want. Another startup, Try.com, integrates with the e-commerce sites of retailers, including Nike, Ralph Lauren and Zara, and allows consumers seven days to try on clothes for free and ship them back using a prepaid envelope if they decide not to keep the items. Conversely, in the absence of a try-on feature, not being able to feel or see it in real life means those shoes may not fit well or those throw pillows might not match your couch as you had hoped. "For clothing and home goods [such as] curtains and bedding, you want to make sure that the material is of good quality," Woroch says.
Free shipping and free returns allow online retailers to compete with brick-and-mortar stores. But when a dress doesn't fit or a necklace looks chintzy, do you keep it or send it back? It turns out many consumers choose the latter to avoid packing up an item and printing out a return shipping label. "We're lazy in nature, so we just don't do that," says Alex Matjanec, co-founder and CEO of MyBankTracker.com. Ironically, the more time we have to return something, the less likely we are to actually do it, finds research out of the University of Texas–Dallas, perhaps because we procrastinate and eventually decide to keep the item. Woroch recommends checking a store's return policy before you buy material goods. For bulkier items such as furniture pieces or TVs, the retailer may not offer free return shipping at all. However, in some cases you can avoid extra costs by returning the item in-store rather than shipping it back.
Retargeting is a tool designed by companies to lure shoppers back to a retailer's site after you've left. "You search for The North Face Agave Women's Jacket online, and the jacket begins to follow you wherever you go," Matjanec says. "Every time you get online, it's there waiting for you," he says. This can feel a little creepy, so you may want to clear your Internet browser's cookies to avoid reminders of your past product searches. On the other hand, some retailers include savings messages in their retargeting ads, so you could benefit from retargeting ads by getting a better deal on that jacket.
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