up,up, and away: pricing strategies to help online retailers soar

Pricing Strategies toHelp Online Retailers Soar

UP, UP, AND AWAY!

WHY DOES PRICING MATTER?

REPUTATION & BRANDING IMPACT ON SALES/PROFITS

Apple’siPhone 6

SamsungGalaxy S5

Nokia LumiaThe moment you make a mistake in pricing you’re eating into your reputation or your profits.

of customers cited price as the largest influencer on purchase

Katharine PaineFounder of The Delahaye Group

WHAT GOES INTO PRICING?

$299

$199

$99

HIGH

LOW

SUPPLY DEMAND

Decrease priceswhen you have

excess inventory

FAST DELIVERY

of shoppers want a delivery date early in the

shopping process

FREE RETURNS

of shoppers look at return policy before making a

purchase

FREE DELIVERY

of shoppers will add addi-tional items to their cart to

qualify for free shipping

PRICING STRATEGIES: WHAT WORKS AND WHAT DOESN’T

EXAMPLE

Having an original price visible as an anchor when an item goes on sale makes it more psychologically appealing.

ANCHOR PRICING

WHY IT WORKS

Shoppers feel like they’re getting a deal and are more likely to buy.

CHALLENGES

Mobile makes comparison shopping easier than ever: ⅔ of consumers use smartphones in store to expand their shop-ping capabilities.

ONE-PRICE POLICY

EXAMPLE

Unilateral Pricing Policy for large TV brands Samsung & Sony.

WHY IT WORKS

Helps eliminate showrooming and price erosion.

CHALLENGES

Sales are determined by the manufacturer, leaving the retailer with limited decision making abilities.

SEGMENTED PRICING

EXAMPLE

Target’s Room Essentials pillow selection are in the $0-$24 range vs. Target’s Threshold pillow selection in the $15-$49 range.

WHY IT WORKS

Deliver similar products for di�erent market segments.

CHALLENGES

Customers may not see the value in more expensive seg-ment’s products.

DYNAMIC PRICING EXAMPLE

Changing the price of headphones when tra�c is low late at night to increase conversions.

WHY IT WORKS

Changing prices based on external and internal metrics make it possible to price for profit and stay competitive.

CHALLENGES

Manually updating prices is costly in terms of time and money.

Retailers that are able to provideadditional value can charge a premium

SALE!

When new products come out, cutting the prices for the older ones

helps clear inventory.

HOW LONG THE PRODUCTHAS BEEN ON THE MARKET

Ex: Summer clothes are heavily discounted when

fall rolls around

BRAND 1

BRAND 2

$189

PRICE

$49SALE!

$37

63% 66% 58%

ADDED VALUE

SUPPLY AND DEMAND

$189

PRICE

$15

PRICE

$49

PRICE

Increase prices when you’re close to

running out

Lower prices when demand

is low

High demand products merit higher prices

84%

Learn more about how Wiser can automate and

optimize your pricing strategy.

W W W . W I S E R . C O M

I N F O @ W I S E R . C O M

1 . 8 5 5 . G O W I S E R

Sources:

AMA

Econsultancy

CNET

Comscore