The following is a guest post from Angelica Valentine at Wiser, a dynamic pricing tool for retailers. Read on to learn more about price parity and establishing a dynamic pricing strategy for your ecommerce stores.
There are so many selling channels available to retailers and shoppers are checking out on all of them. With the rise of the multichannel consumer, shouldn’t retailers have the same pricing across channels?
Price Parity in Retail
Consumers put trust into retailers. They don’t want to believe that retailers would take advantage of them, but this is exactly how it feels when they find a cheaper price on a different channel after they’ve already made a purchase. The solution is simple. It goes by many names, and price parity is one of them.
The idea here is that retailers should have uniform pricing on each and every channel that they sell on. Whether that’s Amazon, eBay, or a webstore, all of them should display the same price to maintain customer trust. There may be objections to this because different marketplaces can require unique pricing strategies, but it’s not worth losing a loyal customer.
For retailers that sell on Amazon, it’s important to keep their policies in mind when planning a multichannel pricing strategy. The marketplace prohibits selling your items for cheaper on your own webstore, so it’s a good rule of thumb to let Amazon’s price dictate your prices overall.
How Repricers Help with Price Parity
Having uniform pricing is a nice idea, but there are so many channels and so little time. Keeping up with an updated price on each channel when there are numerous factors going into that price is time consuming at best. That’s where repricers come in.
Repricers help retailers implement a dynamic pricing strategy that keeps prices flexible to react in real time to several factors. Time of day and traffic levels should affect pricing so that prices increase when traffic is high and decrease when traffic is low. This is one instance in which price parity might not be the best strategy because traffic can vary across all marketplaces and channels. However, it is still worth trying out to measure its impact on your bottom line.
Stock levels are the opposite case. When a retailer is running low, it’s best to boost prices to prevent running out and lower them when they have too much. There are many other factors that should also go into play, such as demand and competitor pricing. Repricers can take it all into account in order to produce optimal prices based on the state of the market. While conditions might be slightly different across channels, repricers make it possible to have prices match effortlessly.
What does the current focus on uniform pricing mean for retailers? Well, to put it simply; the time for uniform pricing is now. Shoppers are savvier than ever and they deserve the same price regardless of which channel they happen to be buying on. The easiest and most cost efficient way retailers can provide their consumers with this experience is with a repricer. Brick and mortar retailers have a unique challenge because it’s a bit harder to change physical price tags, compared to digital ones. However being in tune with online pricing and offering to give a rebate for the difference can be all that it takes to gain a lifelong customer.
Have you tried a uniform pricing strategy?
About the Author
Angelica Valentine is the Content Marketing Manager at Wiser, the leading pricing intelligence suite. Wiser’s flagship product, WisePricer is a full-featured pricing and merchandising engine that monitors, analyzes and re-prices retail products in real-time. WisePricer enables retailers to grow profit margins, price with confidence and improve merchandising through powering the development of a sound pricing strategy.