How significant is pricing strategy for a retail business? Taking into account that many companies go for competitive pricing for their eCommerce platforms. The answer is “very crucial”. You can implement a pricing strategy for your business with the help of online retail pricing intelligence and create more opportunities for growth.
Going for competitive pricing is never a choice but mostly a decision to stay ahead of the competition in the market. For instance, if you do industrial supplies , then you need to go for online retail price intelligence to provide the best industrial parts to your customers at the best price possible. The industrial supplies businesses a very tricky industry as there are many companies that are into manufacturing industrial parts. But, not all of them sell online, so going for an online retail business will ensure your industrial parts are accessible to everyone in the whole world.
There are eCommerce giants like Amazon, eBay, Alibaba, and Walmart. They also go for retail pricing intelligence but on a larger scale as their volume is also quite large. Retail pricing intelligence helps you to understand the customer needs at the right time and you can cater to their demands when it is most necessary.
This blog will help you get an insight into the exact working of the retail pricing strategies and their impact on your business.
So, read on to know more.
What is Retail Pricing?
First, let us understand what exactly is retail pricing. The price at which a consumer buys your product is the retail price of that product. This is also known as the selling price. Now, retail pricing is determined by many factors. It is basically the cost of your production and your profit margin.
And the cost will differ for every product. For example, the retail pricing of industrial supplies will be different from that of the cost of the automotive business. Now, when we say the cost of production it also includes the cost of marketing, advertising and personnel. And this can vary according to the market dynamics. The online retail price intelligence helps you in knowing the distinctive factors that determine your retail price and accordingly enables you to come up with strategic retail pricing for your business. WebDataGuru is one of the leading retail pricing intelligence providing companies.
What Are Your Pricing Objectives?
Before we dive into the online pricing strategies, we need to clear the objectives of your pricing. As they can be different and vaster than we imagine. For instance, an established brand may go for online retail price intelligence and give out offers that are only for a certain customer base. Whereas a new business may provide more discounts to drive traffic to their website and increase sales in that way. So, the objectives of pricing determine the type of pricing strategy to go for.
1. Profit-based pricing:
This type of pricing means you want to have more profits. And the pricing will be higher in order to achieve those results. The profits may be long-term or short-term. For example, you want to sell $10 boots in $60 but you wish to do that only for monsoon. Then, here you might go for higher pricing as the business is seasonal. So, you might adopt a different approach for your pricing strategy.
The ongoing pandemic has made us realize that everything has a shelf-life. And if you want to survive in this competitive market then you must go for good pricing techniques. Here short-term losses can also be a part to survive. So, online retail price intelligence can help you decide the threshold for your temporary survival pricing.
3. Spreading wings in the market:
The market is a giant cake and everybody wants the biggest slice. But not every business will make efforts toward achieving this objective all at once. For example, if a giant eCommerce retailer wants to capture the maximum market share, then it can sell at a very lower price. Whereas a small online retailer might not be able to afford a lower selling price. Retail pricing intelligence can help you in knowing the competitors’ moves and you can offer discounts according to your business capacity.
4. Matching the Competition:
Companies don’t shy away from matching the competitor’s price in order to close the deal. And even offline retail stores have now started to match the online retail store discounts. This is the oldest trick in the book. This objective ensures a sale at every front. But you must have an idea about the competitor’s price to compare it. And online retail price intelligence empowers you to do that. For instance, you sell industrial parts at $45 and your competitor sells at $43. So, in order to get that customer, you will have to either lower the price or else provide additional benefits to lure the customer towards buying your industrial supplies.
Optimize Your Pricing
Every business has to price their products to bring customers and also to make the purchase. This can only be done if the pricing is done in an optimized manner. WebDataGuru offers the best retail pricing intelligence tools for all businesses. With us you can optimize your pricing in the following manner
1. Let the layout sell for you: eCommerce sites are very user-friendly and interactive for a reason. They want the customers to feel like they are having the best shopping experience in the world. For instance, if you are selling industrial parts, then you might add a specific feature on the site for free installation. Now, this might click with a large number of audience as it helps them from the hassles of installation. And how can you target these customers? Yes, online retail price intelligence is the answer to that question.
2. Use Analytics to Understand Consumer Behavior: Consumer behavior studies are going on for ages and all big brands do that. As every consumer is different but there are certain patterns in which they shop. For example, some shoppers will only buy during the sale whereas there are some avid shoppers who buy every time they see a pop-up. So, as a company, you need to decide when to take the leap. Retail pricing intelligence helps in studying consumer behavior and enables you to make decisions accordingly.
What are the 5 Ultimate Online Retail Strategies for Increasing Sales?
1. Pricing Below Competition: This is the most common practice all across the globe for every business. Dropping the price happens for an assured sale. But this is not easy. Having a lower price means having a lower cost as well. This can only be achieved with a good online retail price intelligence tool. You can get a good deal from your supplier only if you know what is the market trend. You can also decrease your cost of marketing with a deeper understanding of the customer preferences which can be known with research and analysis.
2. Pricing Above Competition: If you wish to sell at a higher price then you must have a constant watch over your inventory. Also, if the prices are higher then retailers need to justify the pricing with aspects like better quality, additional services, better brand experience and the like. This is the aim of many companies but not every business is able to pull this off. As the niche is less and your objective is to make higher profits. For instance, the industrial supplies industry is quite lucrative. Sometimes certain industrial parts are not manufactured by everyone. This creates a gap in the market and you can charge higher for that part.
3. Charm Pricing: Yes. It is a type of pricing strategy. You might have seen products priced at $19, $199 and $49. Now, this is to charm the buyer with the perspective of buying at a lesser price. Our brain interprets that $29 is in the price range of $20. And people buy with the mindset that they only spent $20s. Many big brands even experiment by pricing their product ending with the digit 5 like $345 and #115 to charm the shoppers. Our brains are mysterious organs indeed.
4. Decoy Pricing: This can be mostly seen in movie theatres and fast-food joints. Like there will be regular fries, medium fries and large fries. The movie theatre wants you to buy the large fries so it will strategically price their medium price a bit higher to make you think that you got a bigger bargain.
Small popcorn tub- $15
Medium popcorn tub- $24
Large popcorn tub- $26
Now, here if you are going to buy the medium size tub you would not mind spending an extra $3 for the large size tub. So, the medium size pricing is just a decoy in order to sell the large size tub. Now you know. The same can be applied while selling online. You can provide a decoy pricing of the product and then push the pricing that you need with that decoy.
5. Bundle Pricing: You might have seen the suggestions in any eCommerce platform saying “mostly bought together”, or “people also bought”. Now, this is done to encourage more purchases. And companies give offers when you buy a bunch of products from them. This is a win-win for both brands and the customers. The customer gets a good deal and the company sells more products with one approach.
Drive Your Sales Higher
Going for pricing intelligence will help you achieve bigger goals than just profit margins. WebDataGuru can help you in building an effective, efficient and elegant pricing strategy that works for a longer time. So, contact us today or Book a demo!