In this exciting new series on Prisync, Wir haben unsere Software, unsere eigenen Juckreiz Kratzen oder so zu sprechen verwendet.. Wir haben im letzten Monat analysieren die Preisgestaltung Datensätze für den Einzelhändler verbracht., John Lewis und die Ergebnisse sind unglaublich.
Wenn Sie jemals wollte wissen, wie die großen Akteure ihre eigene Preisgestaltung Strategie Verhalten, read on to find out more.
John Lewis is a high-end department store that operates throughout the UK, Republic of Ireland and Australia. The first brick-and-mortar store opened in 1864, in London.
Known for their expensive and high-end goods, as well as their famous Christmas adverts, they’re a great online department store to study to get a clearer picture of various pricing strategies that work.
What did we analyze?
We used a sample of over 100 products from various product categories including:
- Baby and Kids
- Electric and electronics
- Gesundheit und Schönheit
- Startseite & Geräte
We looked at the competitive advantage of John Lewis, what type of customers they have and how this affects their pricing decisions, whether or not they make use of special deals or offers and the UX of their pricing structure.
All of this data was used to put together a holistic view of John Lewis’ pricing strategy to provide you with ideas for how you can mimic the same techniques within your own eCommerce store
What type of customers does John Lewis have?
As we mentioned before, John Lewis is a department store with products in a range of categories.
In der Regel, they attract customers looking for high-end products and shopping experiences.
According to research by Statista, zwischen 2016 und 2017, John Lewis’ print and digital magazine reached a wide number of people, but the demographic group with the highest reach were adults over 35.
In der Regel, John Lewis’ demographics can be described as female and over 35.
Jedoch, recent reports over the years have suggested that John Lewis is beginning to bring in younger customers, as well as men.
We’ll now look at their pricing strategies and tactics and consider whether their demographic has any effect on how they price their products.
Psychological pricing strategies
Of the products we looked at, 47% of them used the $.99 strategy which is a type of Charme Preisgestaltung where the products use the figure ‘9’ to make their products seem cheaper than they are.
This strategy seems to be used more commonly in their higher-end products than their lower ones.
Denken Sie darüber. John Lewis is a high-end retailer where shoppers are happy to pay a premium for their products.
This doesn’t mean they aren’t looking for a bargain too.
The reason John Lewis perhaps doesn’t use the charm pricing strategy on their lower-end products is that although they want to appear as though they are a bargain store but still want to provide their customers with the perception of a good deal.
A perfect example is if we take their umbrellas.
Natürlich, an umbrella is a much easier product to buy on a whim, as opposed to a sofa. You’ll see above that the charm pricing strategy hasn’t been used. This is because, generally, if you’re looking for an umbrella, you understand it shouldn’t’ cost you too much money anyways, therefore you don’t need a special pricing strategy to convince you to buy.
Competitor price comparison
As John Lewis is a high-end department store, it makes sense to only compare their pricing strategies with other stores of the same merit.
Department stores like Selfridges, House of Fraser, Bloomingdales and Macys can all be considered a competitor of John Lewis.
From our analysis, across all products we tracked, we saw that 31% of all prices were above the average and 68% were priced under the average price compared to their core competitors.
There is probably a good reason for this. Although John Lewis operates as a high-end department store, there are others (Macy’s, Selfridges) that stock more expensive products and perhaps market themselves to an even higher-end customer.
Dies vorausgeschickt, John Lewis still understands there are certain product categories where they are able to go above market rate and still make a profit. (We’ll touch on individual product categories further down).
The rate of price changes
In the period we’ve tracked the sample products of John Lewis, we discovered that they decreased by 4.12% der Produkte, increased by 8.25% und 87.63% remained constant.
The low percentage of price increases and decreases could largely be due to John Lewis having a solid pricing strategy that doesn’t need as much constant optimization.
This follows in line with what we think, auch.
It’s very important to track your prices, see what your competitors are charging and optimize to support that. But with that said, when you have a strategy that’s working for you, don’t rush to make changes too rapidly, or all at once for fear of not getting a clear understanding of which products are working at which price point.
Baby and kids
In the Baby&Kids category, John Lewis’ prices are under the average. The retailer follows competitive pricing strategy in that category. In dieser Kategorie, John Lewis’ competitors decreased 7.25% of products during the analyzed time frame, increased 7.97% und 84.78% were kept stable.
In comparison, John Lewis lowered 10%, increased 50% und 40% were kept at a constant price.
We mentioned earlier that on a whole, John Lewis’ prices for this category were under the average compared to their competitors.
This could be a strong reason for increasing 50% of their products. In this instance, John Lewis could be experimenting to see how increasing the price affects customer’s willingness to buy.
As they’re already selling products in this category at an average lower price than their competitors, they have scope to increase them marginally until the market pushes back.
In the electronic category, 28.95% of the products were above average and 71.05% were priced under the average.
Wettbewerber, in the time frame, specified, decreased 8.96% of their products, increased by 3.40% und 87.64% were kept stable.
John Lewis, in comparison, decreased the price of 13.16% of products and increased 86.14%.
This insight is really interesting simply because over 70% of the products in this category were priced under the average.
This is probably a large cause of why John Lewis increased 86.14% of its products. This may be due to seasonal efforts, where people are less likely to make big purchases during the summer.
You’ll also notice, on the main category page, John Lewis highlights the clearance section at the top.
This tactic is used to get people to consider products they may have not considered before.
Without having direct access to John Lewis’ specific strategy, we’re unsure whether highlighting the clearance section is to reduce excess stock, increases revenue for this category or simply encourage people to browse this category further.
In Fashion, across both women and men’s brands, 61% of products were priced above the average and 39% were priced under the average.
When it comes to price change rates, competitors decreased 9.84% of their products, increased by 14.21% und 75.96 were kept stable.
Jedoch, John Lewis lowered 20% of their products and increased 80% of product prices.
You’ll notice, compared to the electrical category page, John Lewis doesn’t highlight the fashion clearance section, even though one exists.
This could be due to them being a high-end retailer and understanding that when it comes to clothing, their customers really value product quality and are happy to pay a premium for it.
This idea of ‘premium’ could also be a core reason why they increased 80% of their product line within this category.
Home and Garden
In the home and garden category, insgesamt, 32.35% of all products were priced above the average, und 67.65% were below the average. During our analysis, competitors increased 6.51% of their products, decreased 9.84 und 83.65% were kept at a constant price. John Lewis, jedoch, lowered 47.06% of their product prices and increased 52.94%.
Selling products in the home and garden category involves a different set of marketing than other categories. This is because largely, you’re less likely to browse in this category and instead, look directly for what you need.
Zum Beispiel, how often would you buy new outdoor garden furniture?
Only when you have a need for it. Products in this category usually have a long life and so are bought much less often.
This is perhaps one of the reasons why 67.65% were below the average. John Lewis could be trying to undercut the market, using a competitive pricing strategy in order to capture their potential customers when they are ready to make that purchase.
Gesundheit und Schönheit
When we looked further into the health and beauty category we saw that while the competitors had a healthy range of increases and decreases (13.24% of products decreased in price, 14.21% increased in price and 6.62% were kept the same). Conversely, John Lewis increased all of their prices for the time we tracked.
This makes a lot of sense. You’ll see that at the top of the health and beauty category that John Lewis have a “price match” tool whereby they promise to match all their competitors offers.
As they were currently underpricing most of the products within this category, they were able to combine an offer with an increase in price.
This is a super clever technique to increase your prices without alienating your customers.
From a consumers perspective, you’ll be pleased that John Lewis will match each competitors price and deal, but from John Lewis’ perspective, they’re able to comfortably increase their prices within this category.
John Lewis pricing UX teardown
It’s all well and good to have a solid pricing strategy in your eCommerce store, but what’s also important is how you present those prices to your customers.
The UX of pricing is super important to visualize the price you’re offering and the reasons behind it.
On a category page, John Lewis has the price of the product below the item. This is an effective strategy as naturally your eyes are drawn to the images first.
Sie, dann, only tend to look at the price of the product you’re actually interested in buying.
They also use a mixture of colours to express when a product is on offer, or reduced by using red to show the discount offered.
On product listing pages, John Lewis keeps the entire page clean and void of distraction. This is a great conversion technique as once the customer gets to this page, they’re considering making a purchase, so it’s important you make this process as easy for them as possible.
John Lewis also go as far as to list the price twice, making sure there is never any confusion as to how much the product will cost the consumer.
What can we learn from John Lewis pricing strategy
We’re able to learn a great deal from tracking John Lewis’ prices across a range of categories and products.
Most notably, anyone who has an eCommerce store with a large number of products should take special note at the rate to which John Lewis increase and decrease their prices.
When you have a large online store, you’re able to make changes much more frequently simply because, for the most part, customers use online department stores to find exactly what they’re looking for.
Zum Beispiel, if you have a store with only two products, it will be very obvious when a price which might normally be $30 suddenly increases to $60.
Während, when you’re operating your store across multiple categories and hundreds of products within those categories, you are in a much better position to experiment with your prices as market demand rises and falls.
If you want to start tracking your own pricing to see how it fares against competitors, why not try a free trial of Prisync, Unsere e-commerce competitor price tracking software.