In 2019, if you want to win in the world of e-commerce, you can’t afford to not think about your pricing.
In fact, with so many different pricing strategies available, now is the perfect time to analyze what you’re currently doing and see if there are areas or things you can improve for next year.
Due to high competition and rapid changes in consumer habits, pricing strategies are subject to change, and 2019 is no different.
While some companies might opt for a cost-plus pricing strategy, others might lean more towards purely dynamic pricing.
In this post, we’re going to look at what e-commerce pricing strategies we predict will be most popular in 2019 and what pricing strategies you should leave behind.
Increase in omnichannel
Your customers have much more say as to where they shop and when they shop. Because of this, we predict omnichannel pricing will see a significant increase in not just consumers who use it, but the retailers who adopt it into their strategy.
An omnichannel pricing strategy involves looking at where you sell your products online and seeing if you need to vary the prices across channels.
For example, Chillys sell their products both on their own store and on Amazon.
On Amazon, their 750ml bottle costs £30.00.
However, if you were to buy it from Chillys direct, then you’d only pay £25.
There could be a range of reasons why Chillys decide to increase their prices on Amazon as opposed to their website.
One reason could be because on their site when you go to checkout, they offer you a range of other items you might want to add to your basket.
This process of decreasing your product’s prices to increase the average order value is a great way to maximize your profits.
So when it comes to your 2019 e-commerce pricing strategy, think about what channels you currently sell on and whether there is an opportunity to either increase the number of channels you sell on or vary the prices across channels.
Remember, different channels attract different audiences and your prices should reflect that and work with those channel dynamics, not against them.
Dynamic pricing always wins
Dynamic pricing, backed by data is one of the pricing strategies we think will dominate in the coming years.
Now, more than ever, e-commerce owners have access to hoards of data about their customers, their competitors and the market in general.
Because of this, we’re able to accurately make decisions about our prices that result in positive ROI.
Dynamic pricing is just one of those instances.
Dynamic pricing works by automatically adjusting your prices to meet the demands and nature of the current landscape.
It factors in a number of things from:
- The customer’s location
- Time of day
- Day of the week
- Level of demand
- Competitors’ pricing
You’ll have experienced when booking flights that the flights increase the more you look at them. This is a psychological way to increase the likelihood of people making a decision and finally purchasing.
If you’ve read any of our other content, you’ll have heard about value-based pricing. Consumers are much more likely to buy into a brand more so than ever.
You’ll have heard people in the past saying: “you’re only buying the brand” when they spend $70 on a t-shirt they could probably get for $5.
Value-based pricing works on the premise that you can charge more if your customers believe they are getting increased value from owning your product.
This works well in a number of ways. Designer goods and necessity.
When it comes to designer clothes, sometimes they’re made from the highest quality goods, but other times, you’re simply paying for a name in the label.
For example, this hat costs £320
Whereas, if you go to another online store, you can buy a similar looking hat for a fraction of the price.
When it comes to necessity, what you need to play on is the fact that when someone needs something, it suddenly becomes more valuable.
Think about it, you’re more likely to pay a premium for an umbrella when it’s already raining than you are in the height of summer.
This is because the perceived value of the item increases when the needs do.
If you want to adopt value-based pricing into your e-commerce store in 2019, think about what value you can show your customers.
Is there value in how your product was made?
Is there value in the story behind your brand?
When you find out the value your products or business offers, you’ll be able to increase your prices in accordance with that.
Another pricing strategy we predict will gain significant traction in the following year is bundle pricing.
We predict this pricing strategy will become popular for e-commerce vendors in 2019 because with more and more customers willing to shop online, what comes with that is a need to get more for their money.
Bundle pricing is effective because of the customer’s perception of the value they’re getting from the products.
Often, when you bundle the prices of products together you increase the average order value.
Where some customers might’ve only purchased one-item, they actually end up purchasing way more because the price of the bundle offers a good deal.
Let’s look at an example.
You could buy this camera bundle for £649.00
However, if you go on their website, you’ll see that to buy the items separately would cost you much more.
This works because say, for example, you were just looking to buy the camera. You’d spend around £450.
Now if you were keen to get the accessory bundle too, you’d increase your order in terms of monetary value, but also for you the value of the items increases too.
Bundling your items together is likely to be an increasingly popular strategy in the coming year.
However, do make sure that if you adopt this strategy, you bundle like-minded products.
Look at your historical data to see what products people usually buy at the same time, and create product bundles to increase your customers to spend more money and gain more value.
What do these pricing trends have in common?
We’re all gearing up to make 2019 our best year yet, so why not go into the new year armed with the information you need to make your prices a success.
We think the focus of next year should be on providing your customers with as much value as you possibly can.
In this post, you’ve learned the four pricing trends strategies we think will dominate the world of e-commerce next year.
We’re excited for you to try some of them out and see if they increase your profits.
And who knows where we’ll all be next year!
What changes to pricing are you going to make for your e-commerce store?
Leave a comment below.