The lowest price doesn’t mean the price is right
Many retailers make the mistake of making their prices the biggest point of differentiation.
Here’s how they can change that.
Retailers need to treat their businesses like the treasures that they are. Incredible products, customer service, and prices can help shape brand value. However, impressions about your prices aren’t half as everlasting as your brand experience.
To stay ahead of the competition, many retailers cut corners and simply try to compete on price. Constantly striving to have the lowest price might be effective for giants such as Wal-Mart or Amazon, but it doesn’t make sense for most retailers.
The right price is rarely the lowest price. If that were the case, online retailers’ profit margins would simply cease to exist. Staying competitive goes beyond pricing, and here’s why:
Amazon’s strategy is impossible to copy
Now, you might run an amazingly efficient business. Actually, let’s just assume you do. But, do you think you could reprice your products millions of times a day, sometimes repricing a single product more than 10 times in a 24-hour period?
Amazon is a repricing machine, and retailers who spend all of their energy trying to keep up aren’t going to get very far. The retail giant is pretty much impossible to compete with in terms of price, but that doesn’t mean you should ignore it.
There’s a good chance you sell on the Amazon marketplace, and that’s a great idea. It has incredible reach, and there are ways you can use it to improve your visibility.
The marketplace is very crowded, so it can be hard to stay competitive. But, staying visible isn’t too hard, and you can actually use it to direct traffic to your site with Amazon Product Ads.
Tailor the customer experience
If competing solely by having the lowest price is a bad idea, how should you compete? Justify a premium by adding value. Improve the customer experience on your site to attract shoppers not because you have low prices, but because you are a reputable seller.
Offering live chat improves the customer satisfaction rate by 73%. That way you can be helpful and answer any questions that the shopper might have. While 84% of customers cite price as the largest influencer of a purchase decision, 86% are actually willing to pay more for a good customer experience.
One of the key factors in ecommerce is customer loyalty. About 70% of customers will return if you resolve complaints, and since only 1% of shoppers feel vendors consistently meet their service expectations, being helpful can help you make your brand more valuable.
Add value to your brand with valuable products
Adding value to your brand can help you stand out in a crowded ecommerce market.
Even though Amazon and Wal-Mart are known for their low prices, they aren’t exactly known for their prestigious assortment of products. The same goes for the other end of the spectrum.
Retailers such as J Crew or Ben Sherman are known to be a little more pricey, but are extremely valuable in the eyes of the customer.
Introduce higher-quality items to your store, and emphasize the quality, not the price. Sure, it’s 20% higher than a similar shirt on Amazon, but is the one on Amazon durable? Is it even soft? Entice the customer with product descriptions and images.
While it does warrant a higher price, high-quality products add value to your brand. Couple this with killer customer service, and your brand will be the first name to pop up when a customer thinks “quality”.
There’s so much more to having the “right price” than just having the lowest one available. Sure, it will increase sales, but you may not make any money. Justify the higher prices with product quality, customer service, and your brand value. These four components of your business make up a perfect square.
By giving each the attention it deserves, you can give yourself an edge on the competition.