One crucial element of your omnichannel strategy is pricing. Let’s look at some of the core strategies you can use to ensure your omnichannel pricing strategy is better than competitors’.
Understand the price elasticity of each channel
Price elasticity refers to how much consumers are willing to pay. Each product and channel has its own price elasticity.
If you plan to sell on Walmart.com, for example, your prices should be on par or lower than those on other channels.
Chilly’s is a great example of how price elasticity varies across channels. On their website, you can buy a 500ml bottle for £25.
However, if you were to buy the same product on Amazon, you’d only pay £20.
Chilly’s most likely lowered their Amazon price to appeal to the large volume of buyers who aren’t familiar with their brand. On Amazon, Chilly’s must compete with a large number of suppliers with similar products. Visitors of the Chilly’s website, however, are more likely to be familiar with their brand and therefore willing to pay a premium for the branded product.
Should you use uniform pricing–where your prices are the same across all channels–or should you use channel-specific pricing where prices are altered depending on the channel? Or would you prefer a hybrid technique in which some channels have the same prices and others don’t?
The strategy you opt for will largely depend on your overall business strategy and the types of products you’re selling.
In the example here, you can see that these pens are the same price in-store and online. This could be because the store (UK-based retailer, The Works) is present in most places.
They understand that if the customer isn’t happy with the online prices, they can simply go into a store and buy it there.
To increase the chances of purchasing both online and offline, this retailer has chosen to keep their prices the same.
Now if you were presented with a situation where there were few brick-and-mortar stores, you might consider raising your prices online to account for the fact that people are less able to access your physical store.
Your product categories are important
Some product categories are sensitive to regional and seasonal differences. If you’re selling winter coats to an international audience, you know that there are specific regional differences that should be considered. For example, winter in the United Kingdom is summer in Australia. So if you discount your products on all channels during one of these months you could harm your sales. Similarly, if you notice that it’s mainly your Australian audience who buys from you on Amazon, then you could consider raising or lowering your prices on this channel to account for the increase in sales you’ll make.
Different categories perform differently online. For example, when it comes to furniture, many people prefer to look at it in a physical store so they’re able to see how it looks and feels and whether it would look right in their house. For this reason, you could lower the online prices to account for those people who are hesitant to purchase online. On the other hand, when you consider categories such as electronics, it’s understandable that people are much more tech-savvy and are therefore more willing to buy online.
Use technology to your advantage
Some technologies can be particularly helpful with your omnichannel pricing strategy. One good example is ecommerce price-tracking tools. These give you full clarity and transparency as to what your competitors are currently charging as well as what they’ve historically charged for the same or similar products.
You can use this data to help mold your own strategy.
Technology can also be used to ensure your prices are kept in sync automatically across all channels if you are using a uniform pricing strategy.
When it comes to your ecommerce omnichannel strategy, pricing is of utmost importance. A poor omnichannel pricing plan will lead to frustrated customers and lost sales.
When you carefully consider each channel, its use case, and the types of pricing you can allocate to each, you have the opportunity to dominate the market on not just one channel, but on every channel through which you sell.
Use the tips above and start improving (or planning) your multichannel pricing strategy today!