To keep customers coming back for more, eCommerce businesses are using a range of online pricing strategies to boost sales.
Where would the pleasure be in buying online without Bogos, crazy discounts, and 50% off sales! One of the most difficult challenges for eCommerce owners is determining how much to charge for their products. They believe that not only should their prices be appealing to customers, but that their sales figures should always be in good shape. To keep customers interested and coming back for more, online businesses use a range of pricing tactics.
Here is a list of the top five retail pricing strategies that are worth knowing and following:
Basket Pricing
Basket-based pricing gets top marks for being an innovative way of pricing products to motivate customers to buy more. Jet.com’s implementation of this method is a great illustration of how it’s done. Online shoppers at Jet receive rewards for purchasing things from a recommendation.
The store’s clever real-time pricing system runs in the background. The system, dubbed ‘smart cart,’ connects their customers’ delivery location for their merchandise with the nearest supplier who stocks it.
The product is less expensive the closer the provider is to the delivery location. As a result, reductions may be made while still retaining profitability. Therefore, this is one of the best online retail pricing strategies around.
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Pricing Lower than the Competition
Most of us are guilty of shopping around for the same goods on numerous websites. It’s even more crucial for shops to keep their prices competitive. This is especially true as webrooming and showrooming become more widespread.
When buyers are looking for the same or similar products across multiple online businesses, this pricing technique works extremely effectively. Keeping thousands of products at a competitive price is a tremendous problem. However, it is one that may be overcome with the right technology.
One of many such options is Intelligence Node’s SaaS-based price intelligence suite. You can opt to put your prices lower than the competition at chosen absolute levels. In addition, you can set a certain percentage level using this software. Furthermore, you can establish automatic pricing modifications to counter the competition in real-time.
Loss Leader Pricing
The loss leader strategy is an excellent technique to entice clients to return to your online store on a frequent basis. The goal behind this pricing approach is to keep certain things much lower than what is available on competing sites. Walmart and Amazon are famous for their online retail pricing strategies that follow this pattern. These businesses’ super low pricing not only attracts customers to their stores but also provides three benefits:
- Customers who were only window shoppers become paying customers.
- Increasing customer loyalty
As a result of this pricing strategy, customers are more likely to purchase other things that are more expensive. The goal of this pricing approach is to maintain a high average cart expenditure.
Pricing for quick delivery
Amazon is one shop that is successfully implementing this method. The marketplace leader makes extensive use of its cutting-edge logistics network. With is they not only service clients very quickly, but they also profit from it.
Customers are offered expedited delivery alternatives in exchange for a fee. While Amazon’s prices are lower than those of most of its competitors, it profits from its quick delivery pricing model.
Optimization in Real-Time
The best method to ensure profitability is to use real-time pricing optimization technologies. They can determine the optimum price at which to sell your products. However, always being lower than the competition is not a good retail pricing strategy. Instead, you can exploit real-time out-of-stock circumstances. You can find these by a retail analytics solution. With it, you will know when to raise pricing. Therefore, customers shopping for these out-of-stock products on other sites will almost certainly navigate to you. Thus out-of-stock circumstances are ideal times to raise pricing.
Summary
These online retail marketing strategies can be powerful tools to help bring more revenue into your online business. Basket pricing is a good way to invite people to purchase more from your store. However, pricing lower than the competition can give you an immediate edge in the marketplace.
Loss leader pricing, on the other hand, is a powerful technique that some of the larger online companies use in order to draw customers to their sites. In addition, pricing for quick delivery can entice people to purchase from your site for other reasons. Finally, price optimization is a great tool that you can use to make the most of real-time price changes.
