Retailers often go to great lengths to ensure the consumer’s path to purchase on their site is laid with gold bricks and pleasant surprises.
Unfortunately, many allocate too many resources to the path and a meager amount to the destination.
The destination, in this case, is the product search page, which contains relevant items and their prices.
The price of an item can entice a shopper like the Emerald City or turn them away faster than a gang of flying monkeys.
It’s always a shame to spend so much money on promotions and advertisements just to have a low conversion rate due to uncompetitive prices.
With the holidays coming up, shoppers are going to be looking for a deal, and therefore now is the time to let your prices do the talking.
Pricing is extremely important now because you can use it as your main point of differentiation in your advertisements.
But a good price goes beyond drawing a shopper’s attention. There are plenty of good reasons to focus on pricing this holiday season, and here are a couple of them:
Prices have become completely transparent across every selling channel.
The increase in mobile commerce has given shoppers the ability to check the prices of items online while in-store.
Not only that, but other retailers are also a mere click away.
Shoppers arm themselves with comparison shopping engines to make sure they can get the best price from any retailer.
Since demand is so high during the holidays, you better expect consumers to hop on these engines and discover all of their options.
2. The elephants in the room
Amazon is perceived by many shoppers to have the lowest price on the web, but that is not always true.
There’s a new major competitor to Amazon that surfaced a couple of months ago, and its name is Jet.
Jet came into the ecommerce space with prices that were sometimes as much as 12% lower than Amazon, but that is no longer the case.
Jet recently dropped its membership fee to stay competitive against Amazon.
This was how the marketplace was going to make profit and not lose money like Amazon, but now its prices are only 4-5% cheaper than Amazon. However, that’s still significant.
As these giants are duking it out on a price level, smaller retailers need to make sure their prices are competitive as well.
3. Price is an important factor to consumers
Research from Marketing Charts shows that 56% of shoppers consider price as the primary influence of a purchase decision.
The next important influence is product quality at 17%, so you can see that price still wins by a landslide.
If you can’t afford to offer the lowest price, that’s okay. There are ways to still attract shoppers, like free shipping.
It will still be saving them money, and protect your margins for the products you’re selling.
However, try to stay competitive where you can afford it, just don’t destroy your margins to make a sale.
4. How to use your price to stand out
It’s hard to stand out and make a name for yourself in the ecommerce industry, especially if you’re a new seller.
However, you can create a sense of urgency by offering limited time sales. You can inform shoppers of these sales through emails or social media posts.
But sometimes competitor prices are so low that you can’t even think of competing without the nightmare of depleted margins.
What you can do is set a minimum spending threshold to qualify for discounts in the future.
Make your prices are competitive now, and offer select coupons for returning customers that are only valid between Black Friday and Christmas Eve.
The holidays are an exciting time for retailers, but it’s also an incredibly busy time.
Prices are continuously being slashed, and it can be difficult to stay competitive. One of the easiest ways to stay on top of your competition’s prices is with a dynamic pricing strategy.
A dynamic pricing strategy can constantly monitor your competitors’ prices and how you can stack up against them.
Constant price cutting leads to price wars, which have become unfortunately common in ecommerce. By introducing a minimum price within your dynamic pricing tool, you can stop price wars from going any further.
Pricing matters now more than ever, and you can get ahead of the competition by offering competitive, profitable prices on all of your items.