Beat Retail Competition with Pricing strategy. But How?

Pricing is very a sensitive topic for retailers. Everyone wants to meet the margins, give the seasonal discounts, cash on the big trends, woo the customers with favourable pricing and the list keeps refreshing. While most people are willing to pay more for better products and services, the situation is more complicated than what it seems.

Pricing due to use of technological transparency, connected customers has a 360 degree rise and fall effect on everyone; be it the retailer, competition or customer. Newton’s third law is very befitting to retail pricing which says “Every action has an equal and opposite reaction.” Today, retailers have more questions than answers to deal with. The pricing dilemma haunts their business every moment.

So, how does one determine what pricing and when? This is going to be a balancing act as customers are high priority in the necessary evil of price war.

Competitive pricing strategies:

1. Loss-leading Pricing

You attract customers with a desirable product at a very desirable rate. This is turn leads to purchase of additional products.

2. Psychological Pricing

You charge 9.99 and thereby create a false impression of saving when the actual price is $10.00.

3. Product Bundling

Charge a special competitive price that is impossible for competition to match. Package items in new ways. For example, certain number of pieces per bag than the number of pieces per bag offered by the competition.

4. Dynamic Pricing

Pricing is based on the availability of items(specific product/brand) at any given time. If the demand is greater then fewer items are available and the price is high.

5. Premium Pricing

This pricing plays on the perception of value. Some people are willing to pay more for thought to be better products and services. For example; branded goods and services like Mercedes Benz.

6. Pricing because you can

Very few people are happy to pay whatever price asked. They have a need to be part of an elite community and religiously follow the brand/product. They perceive that they have something which others don’t.

7. Freemium

These are specifically services offered for free. Once the customer is addicted to it, they are enticed to pay for additional services. For example; Skype.

8. Fulfill Your Customers’ Needs

You will always need this to succeed in today’s competitive retail world. Customers want the extra attention and service so go ahead and pamper them.

Way ahead

What is the best way forward is difficult to answer. A retailer’s differentiation needs to stand out in comparison with competition. One cannot rely on price alone to differentiate. Customer service can provide some respite for sometime. After that, the future is bleak. It is high time, retailers use technology that has inbuilt intelligent pricing features to ride through the fluctuations of the market on a daily basis. GoFrugal offers you one such advantage. Sign-up for a Free trial.

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