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Defend e‑tailing. This is a strategic approach that traditional companies can use 

in response to ‘attack e‑tailing’. It involves differentiation based on other aspects of 

brand beyond price. The IDC research quoted by Picardi (2000) shows that while 

average prices for commodity goods on the Internet are generally lower, less than 

half of all consumers purchase the  lowest‑  priced item when offered more infor‑

mation from trusted sources, i.e. price dispersion may actually increase online. 

Reasons why the lowest price may not always result in the sale are:

● 

Ease of use of site and placing orders (e.g. Amazon  One‑  Click makes placing an 

order with Amazon much easier than using a new supplier).

● 

Ancillary information (e.g. book reviews contributed by other customers enhances 

Amazon service).

● 

 After‑  sales service (prompt, consistent fulfilment and notification of dispatch 

from Amazon increases trust in the site).

● 

Trust with regard to security and customer privacy.

 

These factors enable Amazon to charge more than competitors and still achieve the 

greatest sales volume of online booksellers. In summary, trust becomes the means of 

differentiation and loyalty. As a result, price comparison sites are being superseded 

by sites that independently rate the overall service, such as Compuware Performance 

Management (www.compuware.com), or use customers’ opinions to rate the service, 

such as Bizrate (www.bizrate.com) and Epinions (www.epinions.com).

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