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A profitable pricing strategy that works not only during the Holiday Shopping Season is a challenge that keeps many retailers awake at night. So, we have a few recommendations worth applying to your e-commerce to maintain your desired number of customers to gain the potential of the end of the fourth quarter of 2021 and start 2022 with a bulk of inspirations. 

The end of the year is a fantastic opportunity for retailers, and it would be a shame not to take advantage of it! If you use various promotions and competitive prices during the Holiday Shopping Season, it is worth considering additional aspects of continuing to sell flawlessly in 2022, too.

Lower the price, but do it smart

Low prices for specific items can be tempting and encourage clients to visit the store. However, the main profit for the company will not be from the sale of promoted products but rather other goods added to the cart. Of course, such a strategy involves some risk – the customer may notice that the prices of other goods are not that attractive and decide to buy only the item covered by the promotion. So, it is better to carefully define what items will spin up our traffic and set a margin level for them to avoid a possible loss.

For this purpose, it is worth using price discrimination strategy and adequate marketing tools. Good examples are loyalty programs encouraging buyers to make another purchase or remarketing campaigns targeting people who visited your website. Those marketing tools will let you generate the benefits of the Holiday Shopping Season also after its end.

However, we noticed that giving high discounts does not always make sense, especially to luxury brands. In their case, huge discounts often contradict the marketing strategy developed for many years – hard to imagine that luxury watches or iPhones will suddenly become cheaper by 50% at the end of the year. That is against consumers’ intuition when it comes to such products.

A fictitious reduction in prices is even worse. The awareness of buyers rapidly grows from year to year. Before buying, they check prices on comparison websites and verify whether a given offer is honest. If the promotion seems apparent, the customer will lose its trust in the seller. Many retailers are already aware of that, and they check the price history of their products before running a promotion. They also use comparison websites like eBay, Idealo, or Ceneo to check prices consistency and make sure that the customer will not find any cheaper article among similar items.

Promotions related to price reductions cannot be spontaneous. To avoid guessing, create them based on research that includes the customers’ behavior in previous years and the current situation on the market. The lack of flexibility in determining the product margin does not allow effective adjustments to the prices prevailing in competitive stores. As a result, creating an attractive offer to buyers becomes almost impossible.

Brilliant communication and ingenious marketing

Of course, the offer should remain attractive, but low prices do not need to be the key to winning customers during the Holiday Shopping Season. Therefore, it is worth considering a marketing campaign that attracts attention with something more than just lower prices. One of the ideas is to emphasize values you identify with or organize an engaging social media campaign for fans. How to do that? Create a stunning contest or let your consumers respond to a post in a certain way. This way, you can increase publicity without contributing to costs related to launching a paid campaign. 

Pricing errors to avoid

One of the most common mistakes is organizing promotions for goods that would sell anyway, like cannibalizing future sales, e.g., iPhone13. If the seller lowers prices and starts selling it with a minimum product margin, it may not be profitable overall. Why? Customers who buy the promoted smartphone would probably do that in the future anyway, even at a standard price.

Another mistake is confusing turnover with profits. For instance, if the seller lowers the prices for all products by 50%, he will probably generate a lot of traffic. Although the sales volume may be high, it might not transform into measurable profits.

The third common mistake is the lack of promotional activities from a long-term perspective to keep customers and make them buy after the Holiday Shopping Season ends. Your clients should feel willing to return no matter the time of the year.

Luring customers without unleashing a price war

  1. One of the solutions to avoid price war is to encourage customers to buy by introducing additional benefits not directly related to product prices. It can be a discount voucher for subsequent purchases, free shipping, or extra perks for given orders. Thanks to those solutions, you do not need to compete with prices, and your customers feel that the benefits of making a purchase are even more significant than the price reduction.
  2. Another one is to offer a discount on the entire shopping cart. There is a chance that the customer will purchase more than usual to receive a discount. In the end, your client benefits from it, although you did not lower the prices of a given product. Awesome!
  3. The other way to avoid a price war is to use limited discounts only for those who subscribed to your newsletter. Thanks to that, the customer can feel distinguished as one of the few who could take advantage of the promotion. This solution has the additional value of building a long-term relationship with the client after the sale season.

So war, so far

Sometimes, however, a price war is unavoidable. If the competition offers the same products, you can still avoid the price war selling product bundles. As a result, customers cannot easily compare the prices of specific items, and you have a chance to offer them more value in the form of product kits. Just analyse the data history of your product to create bundles that fit best, e.g., if someone buys a laptop, may need a bag, or an additional battery – it is worth taking this into account when building product packages.

Knowledge leads to efficiency, indeed

Remember that maintaining a competitive offer and implementing the selected pricing strategy requires constant price monitoring. To have competitive products, you need data on what prices your competitors offer at the moment. On the other hand, if you want prestigious products to be sold at “prestigious” prices, you can not miss the competition movements in that segment and any changes on the market, which can influence your position. A moment of omission and your product drops to the mid-range level. 

However, keeping up to date with prices is not easy and requires time and work organizing. It is not enough to check offers on the platform where you sell. Often you still have to examine the competition on other popular websites, such as Google Shopping or Allegro. That’s why we, in Modvise, streamline the entire price management process by using data technology for price monitoring. We collect data on selected products from preferred websites in one place, updating information even in 30-minute intervals. And instead of a staff of people to handle the topic, one person is enough to control your situation on the market, quickly notice significant changes in prices, and immediately react. 

Holiday Shopping Season ends, but selling still goes on

This year’s Holiday Shopping Season is coming to an end. Nevertheless, the sale continues, and new promotions will appear in the new year, as always. When continuing sales activities, remember that you do not need to focus only on the prices – it is also worth bearing in mind:

  • the product-related issues, 
  • thinking ahead, and 
  • maintaining relationships with customers after the shopping season.

The critical factor in creating a strategy is also an analysis of the popularity of products, checking which articles were most popular among customers, determining which products bring traffic and what you want to sell as part of cross-selling. After the sales season, you need to check if the chosen strategy has brought the expected results and what did not work out to improve it.

It is crucial to keep customers interested in your offer in the new year, for instance, by using the Everyday Low Prices strategy. Reasonable pricing volume for most of the products in your store will make more customers back to you, knowing they do not have to look for better offers in other stores. Customers returning after the Holiday Shopping Season is a treasure, and it is worth caring about them constantly for a whole year.