Pricing is an important aspect of any business. The right pricing strategy can impact a business in many ways. It can help in fetching an increased customer base, fighting competition, and improving sales and revenue figures. There are different types of pricing strategies for retailers and everyday low pricing is one of them.
In this blog post, we will explore how everyday low pricing fosters a customer-centric approach by delivering exceptional value, convenience, and trust.
What is Everyday Low Pricing Strategy?
Everyday low pricing is a strategy wherein the retailers set lower prices consistently on their products instead of offering promotions or discounts. Unlike the high-low pricing strategy, EDLP creates a notion that the customers can always buy your products at a lower price while making the purchase. The EDLP pricing focuses on optimizing sales by providing low prices for products as compared to the competitors. This helps in improving the sales volume.
Concept behind Everyday Low Pricing
The strategy largely relies on the fact that customers are usually attracted to the consistently low prices of a product. The perception that they are getting the best deal at a low price makes them come back. Also, when a product is consistently priced low, customers feel certainty and are highly likely to repeat the purchase. Customers need not wait for the discounts or promotions as a particular store or brand always offers products at the lowest prices. The everyday low pricing strategy is suitable for specific product categories as it works on high sales volumes for generating profit.
Benefits of Everyday Low Pricing
One of the major benefits of EDLP pricing is that a retail business can expect an increase in sales for a longer duration because of the customer’s desire to get the best deal consistently at a lower price. Also, there is no need to keep on adjusting the prices for promotions and competing with others in the market.
There is no pressure of attracting customers during the sales event. Yet another benefit of everyday low pricing for retailers is that retailers don’t need to invest in specific promotional activities for discount events and low pricing deals as they have low prices fixed for most of the time. Walmart applies an everyday low pricing strategy which reflects how their long-term strategy translated into a profitable model for their store. To date it has remained their core pricing fundamental. However, it might not be a suitable strategy for every retailer.
1. Garners Customer Loyalty
Everyday low pricing builds trust with the customers. customers by offering consistent and fair prices. Customers appreciate the transparency and predictability of prices, which fosters a sense of loyalty and encourages repeat purchases. WebDataGuru is one of the leading data extraction companies providing the best services to all kinds of industries. This in turn helps in retaining the customers for a longer tenure.
2. Ensures Convenient and Peace of Mind
One of the key benefits of Every Day Low Pricing is the convenience it offers customers. With consistent and transparent pricing, customers can plan their purchases confidently, knowing that they will not miss out on better deals or fall victim to price hikes. This convenience factor builds trust and establishes a positive customer experience, leading to increased customer satisfaction and loyalty.
3. It helps Build a Sustainable Business Model
To begin with, EDLP may require businesses to operate on lower profit margins, but the focus on customer satisfaction and loyalty contributes to the long-term success of the business. A loyal customer base built on trust and value is more likely to generate repeat business, positive word-of-mouth referrals, and increased customer lifetime value. This sustainable business model allows businesses to thrive in the long run by prioritizing customer-centricity and fostering enduring customer relationships.
Problems with Low Pricing Strategy
One of the main disadvantages of EDLP pricing is that retail will fetch a low-profit margin. As the retailer sets the lowest price for their product, the margin they get from the cost of the product and selling price is minimal. Hence, the everyday low pricing strategy can only prove to be beneficial when there is a significant sales volume and a long-term plan. It takes substantial time for a business to get a return on its investment. Therefore, it might not be an ideal choice for some retailers.
Everyday low pricing strategy works on consistent prices and minimum advertisements. The high-low pricing strategy requires promotional deals and events for increasing the interest of the customers for grabbing the deal. The ELDP pricing doesn’t depend on sensational promotional activities for attracting the customers via deals. Therefore, retailers following everyday low pricing might not be able to attract the buyers during special shopping events.
There is also a risk of the brand creating an identity of low quality owing to the low prices. There is a possible risk of losing your brand credibility.
Difference between Low Pricing vs High-low Pricing
Both low pricing and high- low pricing are popular strategies used in the retail sector. The everyday low pricing strategy positions the products in the market at a low price without any promotions or deep discounts.
In such a retail store, any product that a buyer picks will be priced well. The buyers will rarely see any sales as the base price offered is already low. Hence, there is no significant room for attractive sales.
The high-low pricing means that the product displayed in the store is more expensive than the average products on the market but the buyers can benefit from some amazing promotions. There are always some products that are sold below the average product prices.
These products are generally traffic generators, loss leaders, or advertised products which are being sold on a temporary offer. The logic behind the promotions is that buyers will get attracted by the discounts and visit the store for making the purchase. Once the buyer visits the store, they will add more products to the cart, even ones that are being sold with higher profit margins.
How to Choose Right Everyday Low Pricing Strategy
Considering the transparency regarding prices in the e-commerce arena, implementing the everyday low pricing strategy needs consistent price monitoring. If a retail business decides to implement the ELDP, it must monitor the positioning of its brand against the competitors in the market for each product. For gaining the loyalty of buyers, a business should ensure that their prices are not above the competitors.
Before implementing the everyday low pricing for retailers, it is important to evaluate the pricing potential. It means the approximate price you can charge for the product. It is important to consider the operating cost, competitive products, and consumer demand for the same. It is also essential to consider how the customer base responds to the prices and how much are they willing pay for your product. Take note of changes in the sales with any price changes.
Try to define a price range for the product that both customer and seller find suitable. Consider the minimal price you can charge for the product and still make a little profit. Also, find out the maximum price that can be charged without losing the customers to competitors. Another factor to be considered while implementing everyday low pricing is to monitor the competitor’s pricing. It is also important to take into account the industry you operate in as different pricing strategies work for different industries.
Redefine Value for Customers with EDLP
Remember, in a marketplace where value and trust are paramount, Everyday Low Pricing is the key to standing out and exceeding customer expectations. Don’t miss out on the opportunity to unleash the power of EDLP and redefine your business’s success. Act now and experience the remarkable impact of everyday low pricing on your customers and your bottom line. Are you ready to revolutionize your business with Everyday Low Pricing? Contact us today to explore how EDLP can transform your pricing strategy, drive customer loyalty, and boost your bottom line. Embrace the power of EDLP and position your brand for exceptional growth and success. Contact us today!