IHS can lead to less price sensitivity at the brand level and more sensitivity to search attributes associated with quality. By providing more information to consumers with minimal search cost, manufacturers and retailers with differentiated offerings will have a greater opportunity to educate consumers about the unique benefits they offer, and consumers will find it easier to access and compare the offerings of firms competing on price. Retailer Entry Into IHS by Retailers Catalog retailers may be more vulnerable to IHS than other retail formats. However, catalog retailers are well positioned to win the battle for consumers' hearts and minds because of their ability to fulfill orders. Catalog retailers' order fulfillment systems and database management skills will give them an advantage as they enter the online retailing market.
Branded merchandise is vulnerable to price comparison, made easier in the online environment.
Retailers that sell privately branded merchandise are less vulnerable to pricing pressures and should realize higher margins. Specifically, the focus should be on attributes that are search attributes in stores but experience attributes online. Provide information tailored to the needs of specific customers. Stores can use either sales associates or information kiosks to provide personalized information to customers. Emphasize the non-informational aspects of shopping, such as entertainment and socializing.