With the rising popularity of omnichannel shopping and the blurring of the lines between different sales channels, special attention must be paid when building multi-channel pricing strategies.
Is it necessary to have a single price across all channels or is it better to change the price? This is undoubtedly the first question that pops up in the mind of any brand or retailer that is building its omnichannel strategy or expanding its existing one.
Before the onset of omnichannel, most companies were betting on a clear channel-specific pricing strategy. Retail and online were completely disconnected and this led to challenges due to the large differences in prices that could be found between online and physical stores.
Here are the pros and cons of omnichannel pricing and specific pricing strategies by channel.
Omnichannel Pricing Strategies
For certain products, price will an important factor for shoppers, but consumers are also changing their buying habits. They’re now focusing more on the quality and brand name of what they buy rather than on the search for the cheapest price.
This trend helps companies build an omnichannel pricing strategy across their different channels, using it as a weapon to break the habit of looking for the best price and putting the quality of the product and service first.
The benefits of adopting this type of strategy go beyond having a homogeneous identity across all channels and increasing confidence with customers. If you maintain a unified pricing strategy, you don’t need to divide your stock between in-store and online channels, and you can always have inventory and services to address customers’ needs wherever they’re shopping.
True omnichannel—where the customer buys online but the stock is in the store—means there will be no need to relabel the product to deliver it or lose a sale due to the lack of availability.
Specific Pricing Strategies for Each Channel
The risk that some shoppers won’t like finding different prices for your online channel vs. your in-store one still exists.
However, unique pricing strategies for each channel might be the better option for you if most of your customers have linear experiences and rarely jump from one channel to another. This can be a good strategy to improve profit margins in each channel.
Collaborative Pricing Strategy
On a related note, you can also create pricing strategies that look to get the best out of both channels. A collaborative pricing strategy allows you to get the best of each channel. In this case, the basis of the pricing strategy would be omnichannel, but with collaboration between channels in terms of offers and promotions.
Segmenting offers will allow you to attract more attention to the channel you want to promote by offering exclusive advantages to consumers and giving an opportunity to connect with them and maintain fluid communication.
How to Choose a Strategy?
There are four points that can help you choose the best option:
- How many similarities your channels share, including in the supply chain or with operations.
- Customer behavior, specifically whether they shop linearly or bounce between channels.
- Global market conditions and channel-specific pricing trends.
- Regional or market needs, especially if you sell internationally.
It is important to build your omnichannel pricing strategy in a way that conveys confidence to consumers and offers a good shopping experience. However, don’t forget that some channels have specific requirements that need to be taken into account.
Make sure you’ve reviewed the pros and cons of each channel before selling there—by doing your due diligence, you can feel confident that your omnichannel pricing strategies are right for your business.