UP, UP, AND AWAY!
Pricing Strategies to
Help Online Retailers Soar
WHY DOES PRICING MATTER?
REPUTATION & BRANDING IMPA...
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Up,Up, and Away: Pricing Strategies to Help Online Retailers Soar

Pricing is one of the most important concepts in retail. There is a lot that goes into it, and there are many ways it can affect your online retail business. A strategy such as anchor pricing can improve the value of your product, but if implemented incorrectly, can damage your reputation. It can be a tricky process, but if the price is right, you can watch your revenue and profits soar.
Published on: Mar 4, 2016
Published in: Retail      
Source: www.slideshare.net


Transcripts - Up,Up, and Away: Pricing Strategies to Help Online Retailers Soar

  • 1. UP, UP, AND AWAY! Pricing Strategies to Help Online Retailers Soar WHY DOES PRICING MATTER? REPUTATION & BRANDING IMPACT ON SALES/PROFITS Apple’s iPhone 6 Samsung Galaxy S5 Nokia Lumia of customers cited price as the largest influencer on purchase The moment you make a mistake in pricing you’re eating into your reputation or your profits. Katharine Paine Founder of The Delahaye Group WHAT GOES INTO PRICING? $299 $199 $99 HIGH Increase prices when you’re close to running out High demand products merit higher prices SUPPLY DEMAND LOW Decrease prices when you have excess inventory FAST DELIVERY 63% 66% 58% of shoppers want a delivery date early in the shopping process FREE RETURNS of shoppers look at return policy before making a purchase HOW LONG THE PRODUCT HAS BEEN ON THE MARKET FREE DELIVERY of shoppers will add addi-tional items to their cart to qualify for free shipping PRICING STRATEGIES: WHAT WORKS AND WHAT DOESN’T EXAMPLE Having an original price visible as an anchor when an item goes on sale makes it more psychologically appealing. ANCHOR PRICING WHY IT WORKS Shoppers feel like they’re getting a deal and are more likely to buy. CHALLENGES Mobile makes comparison shopping easier than ever: of consumers use smartphones in store to expand their shop-ping capabilities. ONE-PRICE POLICY EXAMPLE Unilateral Pricing Policy for large TV brands Samsung Sony. WHY IT WORKS Helps eliminate showrooming and price erosion. CHALLENGES Sales are determined by the manufacturer, leaving the retailer with limited decision making abilities. SEGMENTED PRICING EXAMPLE Target’s Room Essentials pillow selection are in the $0-$24 range vs. Target’s Threshold pillow selection in the $15-$49 range. WHY IT WORKS Deliver similar products for dierent market segments. CHALLENGES Customers may not see the value in more expensive seg-ment’s products. DYNAMIC PRICING EXAMPLE Changing the price of headphones when trac is low late at night to increase conversions. WHY IT WORKS Changing prices based on external and internal metrics make it possible to price for profit and stay competitive. CHALLENGES Manually updating prices is costly in terms of time and money. Retailers that are able to provide additional value can charge a premium SALE! When new products come out, cutting the prices for the older ones helps clear inventory. Ex: Summer clothes are heavily discounted when fall rolls around BRAND 1 BRAND 2 $189 PRICE $49 SALE! $37 ADDED VALUE SUPPLY AND DEMAND $189 PRICE $15 PRICE $49 PRICE Lower prices when demand is low 84% Learn more about how Wiser can automate and optimize your pricing strategy. WWW.W I S E R . C O M INFO@WISER.COM 1 . 8 5 5 . G OW I S E R Sources: AMA Econsultancy CNET Comscore

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