Wiser provides a complete suite of solutions to give retailers, brands and manufacturers the edge to stay competitive and, most importantly, profitable. By fully integrating with the WisePricer dynamic pricing engine, merchants have the tools and data they need to understand the competitive landscape and respond to markets — all inside their ChannelAdvisor account.
Do you agree with the old saying “more channels, more problems”? Maybe that’s not exactly how it went, but it doesn’t have to be that way regardless. Adding more channels into your e-commerce mix is a great way to achieve your profit and revenue goals, not to mention expand your reach and customer base.
The tough part for a lot of retailers is getting channels to work together. To offer the best customer experience, there are a number of factors to keep track of. Inventory management is a must because you don’t want to list an item on one channel when you’ve sold your last one on another a few minutes before. That’s where inventory management software comes in to keep your inventory updated across channels.
Another area, and the one I’ll be focusing on in this post, is pricing. How should retailers price on different channels, especially when each has different demographics with varying expectations? Here are three suggestions for finding answers that will work for you.
1. Know Your Competitors
Marketplaces come with access to a ton of new customers, but they also introduce your products to a very competitive environment. Shoppers can search for what they want, and they might not even click on your listing if you don’t meet their first round of requirements. So that means it’s time to get to know your competitors. Understand what they’re offering in terms of prices, product assortment and shipping policies, to name just a few.
Competitive intelligence isn’t a one-time thing, either. Manual processes leave retailers in the dust because of the inherently fast pace of the industry. The only way to keep up with competitors is to automate, whether that’s with an in-house or third-party competitive monitoring solution.
2. Reprice Often
The competitive data that you gather from the channels you operate on should act as a springboard. When combined with your historical sales data, competitive data can catapult you past your goals. Repricing is now frequently a necessity to keep up with competition. The leader of the pack, Amazon, made it popular by lowering prices to win sales, but it’s more complex than that.
Repricing isn’t about simply depleting margins to win sales; it’s about optimizing prices according to your goals. Based on how much stock you have, the brand image you want to uphold and competitor prices, there are often good cases for increasing prices. You should aim to know your competitive space at all times and reprice based on that data when it makes sense for your business. No one wants to enter into a price war with Amazon or lose sales with prices so high that shoppers scoff at them. Awareness and action go hand in hand.
3. Use Uniform Pricing When Possible
Once you get the hang of repricing, things can get a little tricky across channels. Should you price the same everywhere, or price based on your shoppers’ habits? Typically uniform pricing is the best idea. It creates trust because no matter where consumers shop, they’ll get the same price.
Having lower prices on certain channels to drive traffic and sales can work, but it’s a slippery slope. You have to offer shoppers something extra if your prices are a bit higher on one channel compared with the others. A free gift, faster shipping or points toward your loyalty program are just a few possibilities. It’s time to get creative if you’re going to have different prices across channels.
Being a multichannel retailer is a profitable endeavor with the right data and a flexible strategy. Your specific conditions should drive your pricing strategy, because no two retailers are the same. While you should pay attention to consumer behavior when you set prices, you should always put your brand value first, regardless of the competitive pressure across channels.
Blog post by Angelica Valentine, content marketing manager, Wiser