Take books as an example, Amazon almost always beat the prices of the bookstores (As a matter of fact, I've yet to see a book being cheaper in a bookstore than at Amazon). Why do we still see bookstores around?
One reason I can think of is that people just can't wait to get it NOW.
No, I'm not talking about the case when you really need that pair of ski pants because you're going to Big Bear at 9 am tomorrow and it's 9 pm now.
If you see a new novel written by your favorite author and just by flipping through a few pages you're already very attracted to the story, can you
- Put down the book
- Run back home
- Turn on your computer
- Order the book at Amazon, which costs $5 less
- Wait for TWO WEEKS for the book to arrive since you're using the free Super Saver Shipping?
This effect's even more obvious in women. I always think that
When a woman pays $100 to buy a dress, $60 or more goes into the shopping experience. The remaining $40 or less goes to the dress itself.
If your girlfriend really really, I mean REALLY, falls in love with a dress after trying on ten other dresses and looking at how beautiful she is with the dress on in the mirror the 1000th time, and you tell her
"Hey baby, that looks great on you! I know there's a http://www.shopadresshere.com website and they sell the exact same dress for $20 less! Let's go back home and order it online!"
Wow, even if you can convince her (which I highly doubt), she'll be upset for the rest of the day. Why? You're sacrificing her almost-complete-and-wonderful buying experience, which costs $60, for twenty bucks. The math isn't right.
The reality is that many people can't delay their instant gratification for some long term (even if you're just talking about two weeks) benefit. Wouldn't that be a good explanation why so many people don't have enough funds for retirement?
Jeff Bezos probably needs to create some very real virtual online shopping experience (Second Life?) to lure the people from the malls :P