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Image Courtesy of Choice.com.au
The latest CHOICE research shows that Australians are paying up to 200% more for makeup than overseas consumers.
CHOICE reviewed some of the most popular lipsticks, moisturisers and colognes for its “Pretty Unfair” report, which highlights the significant differences between what Australians, US and UK consumers pay for the same products.
Revlon Colourstay Ultimate Suede Lipstick, for example, is priced at AUD$25.95 on the David Jones website.
In comparison, British website boots.com sells the same lipstick for AUD$15.09, while at Walmart in the US the price drops to AUD$7.89 (plus tax).
Even the seemingly affordable and ever popular Maybelline Great Lash Mascara is cheaper elsewhere.
This mascara – which is often included in lists of the best mascara’s ever – retails for $12.95 at Priceline in Australia, while US department store Target sells it for US$4.49 or about AUD$5.
“There is no way price differences of this size can be explained by the usual arguments we hear about supposedly higher costs of doing business in Australia,” CHOICE spokesperson Kate Browne said when the data was released.
“Our advice is that if you’re not happy with a price, shop around to find the best deal.”
Online Shopping Wipes Off The Gloss
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Australian retailers have previously explained price differences through exchange rates and overhead costs that can come from shipping products into the country.
But with so many online stores now offering free shipping, CHOICE says consumers are questioning these explanations and getting savvier about where to buy things.
“Until recently, consumers relied on bricks-and-mortar stores to price products appropriately,” Browne said.
“But now it’s easier than ever to run a price check online to compare product prices – and many Aussies don’t like what they’re seeing.”
So now change is in the air for cosmetic retailers in Australia. Pressure from consumers and online competitors has already made a difference to pricing of popular makeup brands.
Clinique, Lancome and Shu Uemura are among the few that have recently announced price drops of up to 40% for some products.
But CHOICE warns these drops can often be misleading and many are just “a marketing ploy, reducing only one or two flagship products and making a big fuss about them.”
The Cosmetic Catch-22
So why aren’t companies that have lowered some prices following through and lowering prices on all their products in Australia?
The straightforward answer is that it is not that simple. While consumers definitely want lower prices that match overseas competitors, changes in prices outside of sales has huge potential to hurt retailers – and the economy in turn.
“Raising and lowering prices effectively involves careful attention to timing,” Entrepreneur.com explains in a short guide to make these changes.
“It requires knowing how to affect your customers’ perception of the value inherent in what you are selling. It forces you to study and accurately predict reactions from your competitors.”
The guide indicates that lowering prices can also lead to a lower perception of the value of products – an issue retailers are all too aware of after hit-and-miss results with sales.
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“Prices don’t exist in a vacuum,” the guide notes. “Like the earth under your feet, a price is supported by the value the customer perceives in the product or service to which the price is attached.”
A lower perception of the value of a product, particularly if it suggests “cheapness”, can also lead to a loss of customers.
Therein lies the predicament for retailers: if they don’t lower the price of cosmetics, shoppers could go online to get the same thing at a more affordable price. But customers could end up suspicious if the cost of makeup is significantly reduced, even wondering what is wrong with it.
It doesn’t help that the retail world is in a state of flux, either. As retailers struggle to make profits and compete with online stores, they are also pulling back on any significant changes that could affect their bottom lines.
These issues leave consumers with a few choices to make. Shopping in a store means potentially paying more for makeup but also supporting the local retail economy. Shopping online, on the other hand, could mean a saving of up to 40%.
CHOICE also recommends getting in touch with companies directly to help motivate changes.
“If you think pricing is unfair, be vocal,” Browne said. “Get in touch with the offending companies through social media and ask them why their prices vary.”
While there may not be a definite solution to price discrepancies with cosmetics (or any other products for that matter), at least there is a choice about how and where to buy things. And that gives consumers more power and influence than ever before.
The post Makeup Prices: More Than A Cosmetic Issue? appeared first on Quid.