With the holiday season nearing Retailers are all set to introduce new strategies on the forefront, the competitive spirit touching zenith this time. The holiday sales are expected to make up 19.2% of the retail industry’s annual sales of $3.2 trillion. Until and unless you tell us that you living under a rock, you would probably be aware that it is crunch time for holiday season. When the “winter is coming” and the “Black Friday” edging closer, everyone is talking about what special should be and should not be done for the preparation of the Big Day. As per the analysis the sales are expected to increase at least 8-11% as compared to the previous year and thus the fight to tap the market takes an interesting turn.
Here is the 5 Retail pricing strategy for holiday session which are must to follow.
Strategy #1: It’s all about the offers
It’s the holidays and you should know that every shopper will be looking for the lowest price. Where the market is thronged with offers, sales and coupons you will get tempted to match every price you see. Not only about the lowest pricing but it’s also about the best offers, do rounds of coupon, Buy One, Get One (BOGOs) strategies, combo deals, which attracts the customers and will not hurt your margins too. Though Amazon did not had the lowest price in 2013 but they over-discounted far more than any other retailer, which could have negatively impacted its profitability; however, the online giant still fared well overall. Walmart actually raised prices for the sampled assortment on Black Friday, and this could have been a factor in the retailer’s decreased financial performance.
Strategy #2: Dynamic Pricing Strategy
The matching the lowest price way could lead you to a price war and will definitely affects your profits. The best solution to avoid this is adopting a dynamic pricing strategy. Amazon sold a record 426 items per second during the 2013 holiday season. Amazon doesn’t always offer the lowest price, but it is the most aggressive in changing prices to stay ahead of competitors. Sears, an American multinational online and in-store, repriced 25% of the products daily to stay ahead of the competition, during 2012 holiday season. Keeping with the frequency of price change isn’t easy but allows retailers to capitalize on changes in the market in real time.
Strategy #3: Price tracking and data analysis
By taking a data driven approach to merchandising and pricing, retailers can optimize their strategies to maximize profit and conversions this holiday season. Using data as the fuel for the monthly holiday step-by-step guide will result in great success as a retailer. The marketplace is becoming more and more saturated with competitors, so you’re going to want to identify overlap and gaps to keep your inventory and pricing optimized. Thus depending on the analysis and previous year’s sales you should also know what to stock and what not. Approximately 77% users are seen leaving the website if they don’t find what they are looking for.
Strategy #4: Visibility factor
The mantra is to “Get Noticed”. SEO is one good option, throw in trending keywords and attract more consumers, whether they are shopping or just surfing the net. 1/3 of the online consumers started their search for a product through a search engine such as Google. E-Mail marketing is another way to show it. Around 46% of shoppers discover sales through direct emails from retailers. Advertising is another channel that should be explored. Remember the Santa-Coke advertisement, worked extremely well for them
Strategy #4: Each selling channel should receive equal attention
while the mobile eCommerce grew to almost 50% in 2013 which made almost 25% of the online traffic last year, the desktop eCommerce spending rose to a record high of $46.5 Billion in 2013 which was 10% higher than 2012. Thus it is advisable that you give each of your selling channels the same amount of attention they rightfully deserve because the shoppers are going to utilize them this holiday season. Statistics shows almost 33% of the shopper check prices online while they are standing the store. Thus the brick and mortar store and the online store should be complimenting each other.
There is a lot of pressure to deploy a successful strategy in order to stay relevant and abreast of the constantly changing market, as well as to keep up with customer demand. Another very important thing that shouldn’t be missed out is the website. Stats say, the traffic and conversion rates were 40 times higher on Cyber Monday in 2013. Thus it is advisable to test your website in advance and making sure that it can handle the increased traffic rates that the holiday season will bring. The average cost of website downtime for the top 10 US retailers is $165,000/ hour- to eliminate the chances of a big fail. Holiday shoppers spend 14% more in November than December making November the best time to advertise your pricier products.
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