What type of pricing strategies are you using? Do you understand what you are using and why? How effective are these strategies within your store? 52% of consumers use over 10 different pricing strategies to better their store. Factors such as season, economy and sales all play a critical part. It is important to recognize which factors directly affect each strategy in order to make your store as successful as possible. Here is a breakdown of strategies and how they work.
1) Discount: Discounts can be applied based on product quantity, customer loyalty programs or a specific promotion. This strategy is generally used to increase foot traffic and to obtain return customers.
2) Bundle: Employed by stores such as Costco. Multiple units sold in bulk, making the item cheaper.
3) Below Competition: Products are priced lower than your closest competitor. This may be a challenge to maintain long term, therefore this strategy is generally used to reach your short term goals.
4) MSRP: Keeping product at the manufacture’s suggest price. This maintains the manufacturers margins and brand perception.
5) Odd Pricing: End pricing in odd numbers, such as 99 cents. Giving items a greater perceived value
6) Price Lining: Prices are set to create distinctive categories; signaling a higher level of quality to customers.
7) Dynamic: A more tech-savvy approach to pricing, change the price of an item based off what the customer is willing to pay.
8) High-low: Pricing items above market rate, then rolling discounts are offered on select items to attract customers.