In online retail, you just don't put a price on a product and never change it again. In order to engage your customer-base, you need the right pricing strategy.
Remember the last time you visited your favorite shop? Well, if yes, let’s remember those moments together in detail.
You probably went into the store, gazing through the racks briefly, touching a few of the items for the feel of their texture and, suddenly, you found your beloved one, a t-shirt, a skirt or a shirt or whatever. You quickly hold it on and place it over your body on whatever you wear to get the quick feel of owning it. Then your brain implicitly reminds you the only step between holding that thing in your hand and owning it is actually buying it, i.e. paying for it. Then, right away you try to find the price tag, and flip it around and check how much it costs.
You start to feel the chasm between the racks and your wardrobe. It costs a lot, and you’ll need to save from this and that and that to actually buy that right away. It’s not a bargain, it’s not a deal etc. so you give up, and probably leave the shop after repeating the process a few times.
This is a quite common offline shopping story and the example here was mainly for apparel, but if you ever think that things flow differently in e-commerce while shopping online, you’re sadly mistaken!
Actually, in the online shopping environment, in e-commerce, the prices are even more apparent and you don’t need to twist the tag or something, because it appears in front of your eyes right away along with the product name, its descriptions, etc. Therefore, the online pricing of the product becomes one of the most crucial qualifiers when you start browsing that product at an e-commerce site.
Your customers really care about your online pricing.
For all sizes of e-commerce companies from all around the world, online pricing really matters. Period.
To emphasize that even further, let me share some bold findings to better guide you on how much you should care about your e-commerce prices:
- More than 60% of online shoppers worldwide consider e-commerce pricing as the very first criteria affecting their buying decision. In emerging e-commerce markets, consumers care about online prices even more.
- Around 90% of e-commerce shoppers are quite fluent about hunting deals and invest time for that before deciding on the web-shop where they will shop. This time for e-commerce price comparisons is measured to be around 10 minutes per every item purchased.
- Price Comparison Engines are a key part of the e-commerce marketing stack, as they constitute around 20% of e-commerce traffic for all sorts of product categories. Obviously, this ratio is even higher for product categories where online prices are even more important, and the shopper persona is naturally more price-sensitive, for example, in consumer electronics e-commerce.
That’s why it’s wise to say that e-commerce companies of all sizes from all around the world should be dedicated to focusing on their online pricing management operations and take it as a team sport, rather than leaving it under the management of a few people in a company or a department.
When taken seriously, and managed properly, companies of all sizes would actually see that online pricing can act as a marketing tool and it can have a major influence in product page conversion rates.
Now let’s see how you can start caring about your e-commerce pricing on your site as much as your customers do – or even more – depending on your market positioning and start getting the most out of pricing.
Next page: Cost-oriented and Market-oriented Pricing
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