Almost every e-commerce retailer has their eyes on Cyber Monday all year around and it’s finally arrived!
By filling up their online stores with the best deals and huge discounts, online retailers aim to get a portion of the cake.
Last year they spent $3.45 billion online on Cyber Monday and it became the biggest day in the history of U.S. e-commerce.
Also, Black Friday sales reached $3.34 billion (very close to Cyber Monday) with a 17.7% increase in sales of 2015.
Another significant outcome is increasing the number of purchases through mobile by driving over $1 billion in mobile revenue.
Even though this shopping frenzy seems like a huge opportunity, the customers won’t just go to your shop and purchase your products without any hassle so you have to be prepared for Cyber Monday, to not miss out on this huge selling opportunity.
There are many marketing methods to make the most out of this big shopping day, but as pricing experts, we would like to show you the uncovered topic of e-commerce – pricing.
Let’s start by addressing the following question;
How will you use your online pricing as a marketing weapon and convert these undecided visitors to actual customers on Cyber Monday?
Here are a few pricing tips to cover this year’s Cyber Monday for your e-commerce store.
Analyze your costs and set smart prices
There’s a certain misunderstanding that e-commerce retailers should always race-to-the-bottom when it comes to their pricing.
Although this does go some way to attract floating customers in the online market, it’s not always a good idea to try and cut your prices lower than your competitors.
Because how do you hope to grow your business if your prices are always at the lowest? And how do you hope to compete if your competitors are able to charge lower than you can afford for the same products?
If you want to gain any sort of competitive advantage, you need to keep your prices high.
However, Cyber Monday is all about the deals so what do you do in this situation?
Even though Cyber Monday is mostly about deals, there is no reason to make huge sales if you earn less than you spend (costs) and if you lose money with each sale.
Instead of just setting the lowest prices, you have to find your optimal prices to make profits while being competitive during this shopping craziness. Here is the major question. How can you figure out the optimal price range in the environment considering all variables?
Keep these three points in mind and execute!
Analyze your costs, strictly hug your targeted profit margins and be aware of the competitor prices!
It seems hard putting all these variables into the same equation, but it can be possible to find the mixture of them through competitor pricing intelligence software. With these tools, you’re able to set smart pricing rules by putting your costs in the equation, targeting certain profit margins, positioning yourself among competitors to receive smart price recommendations as an outcome. With that, you can enjoy your smart prices created specifically for Cyber Monday.
Here’s a quick example of setting rules through a competitor intelligence software;
As you can see from the screenshot, your competitive status and your costs are customizable upon your strategy for Cyber Monday.
Search for price increase opportunities
During Cyber Monday, online shoppers continuously search for the best deals and they can be pretty assertive. So, assuming you found your smart price and you became the most competitive retailer in your market, you may still exceed the dose of being the lowest.
So, even increasing the price by $10, $50 or $100 isn’t likely to impact the performance of your competitive position. This is an opportunity to increase & improve your profit margin and still be the best offer in the market.
Why don’t we go through with a real example?
The Nintendo Switch has become the fastest-selling games console in the market and it is expected to be one of the most popular products for Cyber Monday; another holiday favorite for kids (and adults who are still kids at heart)!
Below, you can see two different e-commerce retailers selling the Nintendo Switch 32gb. The first one is the most competitive one in terms of price, selling it at $299.99.
The second retailer sells the same one at $399.00. So, in that scenario, the first e-commerce retailer can raise the price just below its competitor by setting it at $369.99.
This move will bring increased profit margins that lift up the balance sheet and still lets the product be the most competitive one in the market.
The most effective way to gather this intelligence from the market is using competitor price tracking software. By using it, you can instantly detect these opportunities and fatten your margins.
Analyze the past years’ trends
Cyber Monday is the Monday after Black Friday.
In 2018, Cyber Monday will be on Monday 26th November.
The majority of online retailers will sustain their sales and discounts throughout the weekend to let consumers purchase on Saturday and Sunday since 48% of holiday shoppers mentioned that they did the majority of their shopping even on or before crazy shopping days.
Let’s say you start offering discounts before Cyber Monday and target for last minute shoppers or post-holiday shoppers and offer promotions for them.
In that scenario, you can run your sales operations for 5 or 6 days or you may decide to structure your marketing costs to reach the traffic spike on your online store just for and Cyber Monday offering the best deals just for these two days to make the most out of your sales.
Before deciding your winning strategy, you should be aware of the market and price trends at the product level. If you can figure out the price moves of your competitors during Cyber Monday in previous years, you can clearly decide which product to focus and when.
E-commerce retailers should also monitor and analyze the historical pricing trends of their competitors for Cyber Monday while closely tracking actual prices. With competitor tracking software you can generate historical data and display it in graphics that will give you a general idea about the market trends and evolution.
See how their product prices have changed until the week after Cyber Monday. Finally, try to understand why your competition made the price changes they did and how it affected consumers.
Did consumers buy a significant amount more when your competition lowered its prices? Or did consumption remain at the same level?
Be available and detect the stock-out products of the competition
Remember your stock! If you forecast a high volume of orders, you may want to increase the amount of stock to be able to respond quickly during Cyber Monday.
Believe me, consumers won’t hesitate to make the purchase elsewhere if they are not able to find it on your site. In other words, from the opportunity perspective, if they can’t find a Nintendo Switch 32gb from your competitors, they will knock at your door!
Now, let’s talk about the psychology of the consumer! If a consumer really wants to purchase Nintendo and does not have a ton of choices, he/she perceives the product as more valuable and is willing to pay more!
So, if you are able to detect the out-of-stock product of your competitors, the chance of selling it will increase enormously. Moreover, you can set higher prices which will help you to increase the profit margins.
Thus, the e-commerce company with a competitive advantage and stock availability get the potential advantage in pricing.
Don’t forget email
But you don’t have a chance in hell in generating excess sales during Cyber Monday unless you first think about getting the word out about your offers.
It can be helpful to optimize your website to attract new customers during Cyber Monday, but your biggest opportunity comes right from your own email list.
People who are on your email list are there because they’ve either bought from your before, or they’re interested in hearing about your brand.
The email above is a great example of how to get a Cyber Monday email right.
They offer their customers a massive 60% off their products. This is such a high discount if you were ever on the fence about buying one of the items, now is the time you’ll take action and make a purchase.
It’s important to note, though, that the example above is an email selling digital products. Digital products are able to be sold at a much higher discounted rate simply because there’s no inventory involved. The products can be sold again and again without worry to manufacturing costs.
Displays example products
Too often, e-commerce retailers send out their emails only talking about the price deals available. Although this is good, if the customers don’t know which products are going to be discounted, they’re less likely to click through to find out.
By displaying the discounted products right within the email you’re able to pique their curiosity straight away and remove any friction of clicking through to your email to browse products.
Creates a sense of urgency
Finally, they create a sense of urgency through the copy used in the email. “24 hours remaining” helps customers understand exactly how much time they have left to make a decision and make a purchase.
Think carefully about social media
If you’re hoping to attract new customers, then social media will be a great channel to spread your message further than just the people who already know you exist.
Create a stunning social media campaign around the time of Cyber Monday to get people excited about your products, the offers you hope to make as well as the discounts you’re offering.
In the example above, you can see they’ve included images of a load of their Cyber Monday products.
You don’t even have to click through to the site to see them.
But, if any of these images were to impress you, you’d be likely to want to find out more.
Are you ready for Cyber Monday?
Online shoppers are deal hunters and they are ready to spend their money! That’s why you need to be ready for the big day. Load your arsenal with these Cyber Monday tips.
It’s not just about having the best (or cheapest deals) it’s about creating the best deals that still allow you to stay competitive within your market.
Follow the tips and strategies above to make sure your Cyber Monday is a huge success.