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Price Wars - Besting the biggest players in the market
Online shopping and selling online are very popular in today’s world. Customers shop online because many of them believe that they are getting a good bargain. However, price wars and undercutting other sellers is not the solution to winning at this game and increase sales. No doubt, customers look for a bargain price but the long term solution for a seller is not to enter into a price war with other sellers so that they can sell more. This only leads to the creation of a weaker market.
The entire eCommerce scenario is governed by discounts and coupons. Price-competition is high amongst sellers; the battlefield is warming up with offers of next day delivery, rock bottom prices, buy two for the price of one and even discount coupon codes or free shipping. Festival sales further seem to be an extended affair and all this is to the advantage of the customer. There are also certain tricks of the trade that aid in lowering prices as browser plug-ins. The question here is~ are eCommerce price wars the answer to making bigger sales?
Lowering prices drastically only encourages the bargain hunter and not the shopper who is looking for quality. In this brand loyalty will neither be there nor can be expected. With the encouragement of reviews, it is to be noted that even the bargain–only shopper is writing reviews and searches are revealing the lowest price across segments. This is detrimental to the business of big brands because tech add-ons are comparing and contrasting the available outlets for the customer to make it even easier. So most bargain hunters; are flocking to websites with the lowest price. This does not create a healthy market.
Optimizing the pricing of your products based on competitor analysis cannot be stressed enough. This is where Eunimart’s advanced technology platform with deep tech Artificial Intelligence helps by suggesting optimal price through market research and analysis of similar products provides actionable business intelligence so that Sellers can take quick decisions. Eunimart makes it easy to control and manage every aspect of selling across all channels of sales through automation and intuitive AI on a single platform.
In the absence of real-time market research and knowledge, it becomes a situation where you keep wondering – to do or not to do ~ to lower your price or not to?
Let us check out some important Dos and Don’ts:
- Price your products in terms of what they offer to your customers. A customer should not feel that the product is of cheap quality or they are not getting what they pay for. Human psychology is such that the tendency to regard the lowest-priced item as of the cheapest quality is not uncommon. So, in a desperate attempt to sell at rock bottom prices, the seller should not miss out on sales altogether.
- Tailor your approach to customers so that they feel special when shopping. When that happens they will buy from you even if your prices are not rock bottom. Take control of your pricing as well as how you present your products in order to give a wholesome experience to the customer. Offer a variety of prices for different versions of the same product, customize shipping options and make the check out process smooth. Breaking your customers into segments would help you to price your products appropriately, thus, ensuring happy customers from every level.
- Make the price-point experience smooth with simple pricing and faster checkouts, effecting positive decisions. Many customers would prefer that over a bargain. It ultimately boils down to who you sell to. So, refrain from making the biggest mistake of ecommerce – price wars because that weakens the market and affects business in the long run.
- Switch to automation where pricing is concerned. Available data helps you to indulge in positive optimization of prices. It is advised that all online retailers use price testing strategies powered by technology; this helps you to implement the best method of pricing suitable to your product known as A/B tests.
- The success does not lie in getting into a price war, but by promoting your product through SEO and strong marketing strategies. Emphasize your attributes, sell upscale niche products and have a band of loyal premium customers rather than compete at lower pricing strategies. Offer signature products so that the customer remembers the experience rather than the price.
- Lower prices mean that there are fewer returns and logically you need to sell more to improve on your returns. This is a bad precedent and affects the entire market adversely. Pitting against each other in an ill-advised attempt to sell more is not the best option. A hostile environment created by retailers who are at war would not only spell doom across the board but would nullify the aim of every seller which is to ensure that profits are sustainable.
- The answer to many of the related problems lies in studying the psyche of the shoppers and giving them a unique, memorable and functional shopping experience that makes them come back for more at the same time making the prices attractive enough.
Possible negatives of Price-Wars:
- People buying from you at a lower price using the drop-ship option are selling elsewhere at a higher price.
- You can never be sure of the most effective pricing option. So it’s better to get good reviews for upscale products to counter the cheap ones. Many customers believe in being safe rather than sorry and will choose a higher-priced product if he has confidence in the brand. That is where a good review and past experience plays a crucial role and could be the deciding factor of a purchase.
- Counter the price wars with an hour to hour variation in prices by keeping a sharp eye on customer trends. Introducing an organic search on Google that gives your products higher visibility, a fair returns policy, powerful product images, and great descriptions contribute more towards sales than the humdrum price wars.
Price wars are inevitable in any business, but what is the biggest mistake of eCommerce?Price wars again!
Every intelligent retailer will avoid a price war because it can never be to his advantage in the long run. Competition is ultra-strong in the ecommerce sector and the pressure to perform well is high. But you are all set to create a niche for yourself if you avoid the fundamental mistakes mentioned earlier and realize what works well for you. You should also try out deep tech platforms like Eunimart which simplifies and automates the business processes so you can focus on sales. After all, the biggest mistake of ecommerce is the price war. Avoid it at all costs.