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NMSU students determine better prices are often available in local stores

Students in a freshman-level business computer class at New Mexico State University completed a project this spring to find out whether consumers could find better prices through local merchants or on the World Wide Web. They discovered low-priced goods were often cheaper locally, while Web sites frequently offered better prices on big-ticket items.

Jennifer Kreie, assistant professor of business computer systems at New Mexico State University. (NMSU photo by Michael Kiernan)

Jennifer Kreie, an assistant professor of business computer systems at NMSU, said she came up with the idea for the class project after attending a conference. "I listened to a speaker talk about how e-commerce was so great for consumers, but he had no data to back it up," she said. "So I assigned the project to the class and they really got into it."

Each of the 29 students chose 10 items from at least three different categories to investigate. They compared prices for each item on at least three Web sites and at one local store. The class looked at 172 products in 15 categories, including music CDS, books, sports equipment, clothing, electronics, furniture, auto parts, office supplies and toys.

The students looked at the difference in prices of the items, including local taxes or shipping and handling costs. They found 54 percent of the items were cheaper locally. Additionally, they discovered a correlation between the price range of the merchandise and which shopping method was better.

Buying locally was most often cheaper for goods priced $25 and below, Kreie said. "Although the base price of an item, such as a music CD, was sometimes less at a Web site, the shipping and handling costs often pushed the overall cost above the total purchase at a local store."

For example, a student found a recent music CD at a local shop for $15.95, including tax. The same CD was available on the Web for $21.97 after adding shipping and handling charges.

Items costing $75 and above were more often cheaper on the Web. Many products in this price category did not charge for shipping and handling and the base price itself was also often less than the local price, Kreie said.

Another student found golf clubs locally for $797.81, including tax. The same set of clubs could be purchased on the Web for $656.99, including shipping and handling.

Aside from the price differences, students also considered some of the advantages and disadvantages of shopping locally vs. on the Web. There were no unanimous conclusions. Some students preferred shopping on the Web because of the conveniences of avoiding traffic, shopping at any time of the day and having the product delivered.

Proponents of local shopping pointed out that some items were hard to find on the Web and delivery times could mean waiting three to eight days to receive the purchase. They also mentioned the benefits of seeing and feeling the product before buying it and supporting the local economy.

As one student wrote, "Buying on the Internet defeats the purpose of shopping."

The one result the whole class could agree on, Kreie said, is the only way to get the best deal is to shop around.

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PHOTO: Jennifer_Kreie.jpg
CUTLINE: Jennifer Kreie, assistant professor of business computer systems at New Mexico State University. (NMSU photo by Michael Kiernan)

Rachel Kendall
July 10, 2000