OnDemand WTP Pricing Research

Discussion: Are retailers’ pricing strategies too complicated? | RetailWire

According to a survey by Software Advice, 52 percent of retailers use more than 10 pricing tactics, although most revolve around a strategy of discounting.

The study questioned retailers about their experiences with 13 different pricing approaches and found only two percent used two or fewer pricing tactics.

The top eight were:

1. Discount: Discounts based on either product quantity, customer loyalty or tied to specific promotions.

2. Bundle: Multiples of the same product are sold together for a single price, typically lower than purchased individually.

3. Below competition: Products priced lower than the closest competitor pricing.

4. MSRP (manufacturer’s suggested retail price): Designed to maintain the manufacturer’s margins and brand perception.

5. Odd pricing: Ending prices in odd figures, such as 99 cents, for a psychology play on consumers.


Top Comments


Retailer pricing strategies are too complex if the consumer doesn’t respond to them.

The interesting question not addressed in this survey is how consumers actually go about researching and comparing prices. Such a survey would undoubtedly show that consumers price shop and compare retailer store prices with those found online, typically long before checkout.

It is interesting that online consumers can see a “final price” in the cart BEFORE checkout. Often you don’t see the final discounted price in-store until the item has been rung up on the cash register.

In the future a critical question may be how consumers vote based on price transparency and ease of price comparison.

Chris Petersen, PhD, President, Integrated Marketing Solutions

This past Thanksgiving, my wife placed the shopping ads in my lap and said, “So what’s the price I’m going to pay for a turkey”? After looking at the ads, I shrugged my shoulders and said, “I don’t have a clue!”

In short, it has become in many cases from all different types of retailers beyond “ridiculi” (Scanner’s plural for ridiculous).

For grocery retailers in particular, the pricing strategies and quantity of pricing programs have made things so complex that nearly every item on the shelf in some stores is tagged or signed in some way shape or form. This is in addition to aisle stacks making many aisles so difficult to maneuver that it is impossible to thoroughly shop the store. Then they wonder why same-store sales increases are so difficult to achieve.

From my view, every customer that walks through the door is your best customer. Give them the best value, play it straight and don’t make them have to be a mathematician to determine how the items are going to ring up at the register. If you feel you must make them swipe a card to get it, so be it, but don’t challenge their intellect. They are smarter than you think at determining value and that equation includes more than the final price they are paying and whether or not you are gaming them.

Utilization of price management software doesn’t have to make the simple be complex. Yet that yearning by many to find that silver bullet makes many think that there has to be more to it. There isn’t.

Simple, easy and with clarity, and your consumer will reward you in their value equation.


Thinking of the long-standing game show The Price Is Right, if retailers feel that their pricing complexities help consumers “come on down,” then I’m sure they will continue to produce numerous layers of pricing and strategies.

Software capabilities have actually added to the confusion, making it easier for retailers to adjust on the fly and justify it all with fancy algorithms. Honest, base everyday pricing must be solidly established before adding promotional complexity. I fear that some retailers no longer have that solid foundation.

Dave Wendland, Vice President, Hamacher Resource Group


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RetailWire Discussion: Are retailers’ pricing strategies too complicated?

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