A customer, when searching for a product or service may visit your online store, but he or she will leave it to go elsewhere, where they can find a better deal. Regardless of you offering top-quality products, the price is the key consideration for budget-conscious shoppers, who are grappling with a recessionary economy today. This is where retail pricing optimization comes into play.
Increasing competition in the e-commerce industry leaves businessmen with a slim possibility for making errors while formulating the pricing strategy. If you are new in the industry, it is important for you to:
- Achieve the ‘magic price’ that can drive traffic, sales and profitability for you.
- Set a price bracket that should fit in with your overall brand image—which is necessary to establish your supremacy in the market.
The price quoted by you should be relevant to all channels and meet your customer’s demands. To sum it up, you need to set a price that is neither too high nor too low.
Gone are the days when retail pricing optimization was accomplished with rudimentary tools, market research, and gut-feelings. Now, it is actually determined by a data-backed science. You just need to consider ‘what-if’ scenarios, demand modeling, etc. to understand the impact of the product price on your sales and retail business goals.
Nowadays, many retail pricing optimization tools available in the market can help retailers:
- Determine the size and time of markdowns in the market
- Quote initial prices
- Optimize prices for multiple channels
- Increase the conversion rate
- Determine the types of promos that need to be offered to different shoppers
- Incorporate and optimize price solutions in order management and inventory
- Improve the rate of online traffic
- Maximize profit margins
Thus, modern-day retailers can take advantage of modern technologies and use competitive analytics with an optimal sales model to ‘price’ themselves into the hearts of their customers.