ISSUE NO. 69 10/24/12

Bargaining with a seller for better prices used to be a valued and expected part of the sale, but corporate retailers have made that a thing of the past: the posted price is non-negotiable at any retailer in the country. Yet, a new online platform called Netotiate (pronounced "ne-toh-shee-ate") may change the retail game for good, or at least the online one. Netotiate is a direct consumer-to-retailer negotiation platform that lets online shoppers bargain with retailers for a better price.

Shoppers simply submit a reduced offer to the retailer, aided by Netotiate, which calculates the probability of whether the offer will be accepted. Only one offer by shopper is allowed per product. The retailer can accept, decline or counter the offer with up to three different offers, and may offer coupons, free or upgraded shopping or other incentives to close the sale. In addition, it's up to retailers to decide which products they are willing to negotiate on. They are able to evaluate online shoppers' characteristics and behaviors, including how often they visit the site and how long they stay and then set up automatic rules regarding the offers.
Retailers and watch retailer are two vertical retailers that are moving forward with the plug-in. "The Netotiate plug-in gives Jomashop a competitive edge over other online watch retailers, by giving us a second chance at securing the sale for those customers that are seeking a better price or are not necessarily ready to pull the trigger. It's bringing something similar to the Priceline bidding model to retail, and the potential is huge," said Charles Posen, Jomashop's Marketing Director.
"Our plug-in was designed not to cannibalize margins or sales that would have occurred anyway, but rather help retailers engage visitors before they leave to buy somewhere else, or not buy at all," said Amir Farhi, Netotiate's co-founder and Chief Executive Officer.

Shoppers are given a newfound power through a sales transaction that allows bargaining. The ability to haggle a seller down is reminiscent of old-time markets or bazaars in which the value of an item was independently decided upon between two people. In this day and age of standardized, industrialized retail, a product's value has been determined long before the buyer enters. It remains to be seen whether retailers will embrace this resurgence of bargaining but it seems likely that once shoppers get a taste, they will expect similar opportunities from all their retailers. In that event, brick-and-mortar retailers may fight back by introducing their own version of in-store bargaining.

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"Online Retailers Get Website Plug-In To Significantly Increase Sales By Allowing Consumers to Ask for a Better Deal," PR Newswire, 7/26/12

bargaining, Netotiate, online shopping

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