UK - US Pricing Divide

There has been a lot of discussion about the disparity in product pricing between the UK (where I am based) and the US for the same items. In many cases products cost twice as much (and even more in some cases) as they do in the US. So why is that? Do the products incur local costs such as support offices, distribution warehouses and so on? Or is it just a case of greed.

Rock Band is one example of a product which is markedly more expensive than the US version. Where the US retail version costs about $150 (equivalent to UK£75), the UK version will retail for around £180. How in hell do you justify charging the UK equivalent of $360 for this toy?

Translation costs? I dont think so.

Support? Maybe ... but what with all the outsourcing going on probably not.

Greed? Quite likely.

There is some excellent coverage of this particular product and the issues at the RockBand.com forums. We've covered this issue before with respect to how Microsoft and Adobe have followed similarly outrageous sorts of pricing strategies in the UK. It's quite shocking that the British consumer keeps paying prices so far above other, similar western markets for so many products including games, electronics, optics and much more.

Sure we have high sales taxes and import duties, but twice the price? Come on. Get real!

Consumer Alert: Best Buy's Secret Web Site

The Hartford Courant (Hartford, Connecticut) found evidence that some Best Buy sales floor staff are showing store customers products and prices on an internal company web site (Intranet) that walks and talks just like bestbuy.com. George Gombossy, the Courant's consumer watchdog, first tweaked to the alleged problem last month. Now under pressure from Connecticut state investigators, Best Buy is confirming Gombossy's reporting that its stores have a secret intranet site that has been used to block some consumers from getting lower prices advertised on BestBuy.com.

Best Buy spokesman Justin Barber, who in early February denied the existence of the internal web site that could be accessed only by employees, says his company is "cooperating fully" with the state attorney general's investigation. Barber also insists that the company never intended to mislead customers.

The Best Buy intranet site has been referred to variously as a staff training site, a shill site, and by a few other much less savory names. Whatever you want to call an internal web site that happens to contain a variety of price differences from the store's publicly accessible web site, at best you can be sure of two things: confusion, and opportunities for staff to inadvertently sell you something at the wrong price. At worst, such a site could be used to deliberately mislead customers.

As retail profit margins get razor thin, and as consumers continue to demand ever more aggressively competitive (read: lower) pricing, it should not be surprising to find out that retailers may be tempted to use every edge they can get, no matter how unethical it might be. My view is that Best Buy would have been better served by using the money it wanted to invest in the secret web site on staff training instead. As always, the best salesperson is the one who is best informed, ready and willing to help customers find what they need.

The state attorney general will have the last word, no doubt.