Pricing in omnichannel trade
Customers in the digital era have the largest sale price database readily to hand. Today, users have endless price offers that they can compare on various comparison sites, e-commerce sites or on Google Shopping search engines.
These comparisons usually exert quite a large pressure on operators wanting to remain in the market, which leads to a confluence of prices between them on standardised products. Because of this, the only ones that will keep going are the ones that are able to have the least purchasing operations costs, irrespective of the sales channel that they choose.
This guideline, which consists of setting the price of a product or service to be able to determine a company’s revenue, and which goes beyond supply and demand, is known as “pricing” and has become a basic factor in business development strategies and marketing plans.
How to decide the best pricing strategy
Omnichannel trade is a product of our time and consists of the consumer’s interaction on different platforms, in both online and physical stores. In the information age, it is normal for customers to consult all the shopping options before buying a product or service.
Businesses have to be present in their customers’ buying acts, whatever the channel they use to do this. This is when they have to decide their pricing positioning in each channel.
In this aspect, selling on the internet means being fully immersed in the global price comparison since some factors associated with physical selling (proximity, knowledge, etc.) no longer play a decisive role. This means that companies have to fit into the pricing level that they think is the most suitable for their business. They may even personalise supply according to the prior knowledge that they have of the customer.
A company that correctly identifies and analyses the data available to it will be able to develop a better pricing strategy. The advantages of designing your business based on customer experience are evident. Companies improve their sales and their results and generate greater customer satisfaction and loyalty.
To some extent, the 2016 world pricing study by Simon-Kucher & Partners confirmed its relevance. Some 55 % of Spanish companies claim that they are concerned by the price war and 74 % of them trust that the launch of innovative products will enable them to improve their market positioning and increase revenue.
Companies are increasingly more aware of the importance of establishing pricing strategies as the basis of their business plan. It is part of the three basic “Ps” of any good marketing plan: product, promotion and price.
Some companies that have been outstanding for putting in place an optimum pricing strategy are in the airline industry, specifically the low cost airlines such as Ryanair and Vueling. This industry has undergone many changes since its creation, and they have not just been technological changes. Flying has gone from being a luxury few could afford to becoming a product within the reach of everyone or nearly everyone.
So how have they been able to come up with this formula? Well, primarily by listening to their customers. Customers who want to travel comfortably and safely, at a reasonable time; people who do not want to give up flying at an affordable price and who value, above all, the fact that if they are loyal to a brand, the brand should also be loyal to them.
But there are also other companies that are outstanding in the start-up of their pricing strategies, such as businesses working in fashion sales, such as Massimo Dutti, Zara and Mango.
In short, setting prices is a challenge that businesses often face. Therefore, the consolidation of a pricing strategy adapted to each buying channel will enable them to obtain excellent profits, grow at a constant pace and maintain a good profit margin.