Date:06 July 2012
3 Areas Where Multichannel Retailers Can Work On Their Pricing Strategy
Multichannel retailers need to develop the most suitable pricing strategy in order to grow sales and profit margins
Retailers are reacting to the difficult economic landscape by offering promotions and discounts in the hope that this will increase sales and profit margins. All of this is sending out a very confusing message about a firm’s pricing strategy to the general public.
Here are four reasons why inadequate price planning is often implemented by online retailers:
1. Many retailers do not know the product price differences between their own pricing and their competitors’ online and in-store pricing. They do not realise how this gap in their knowledge of competitor pricing is impacting their business. If the price is too high compared to the competition, customers will go to the competitor's website; if the price is too low, the retailer is losing out on profits. Steps need to be taken to introduce adequate competitor monitoring strategies.
2. Some retailers do not realise that customers and product lines work differently in different channels and markets. This needs to be considered when planning prices and promotions.
3. While many retailers have a value range and convenience range, it uses the same pricing strategies and methods for each range’s role. The value range is very price sensitive and generates high traffic and unit volume sales while convenience is not as price sensitive as it catering for a different market – time is in short supply rather than money.
Now more than ever retailers need to use price as the most competitive tool available to them to grow sales and profit margins.
For more information on Profitero's competitor price monitoring service, visit www.profitero.com
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