The ever-evolving and growing retail industry is saturated left and right by hundreds of trends, headways, algorithms, data, and buzz words that can send even an expert’s head spinning. But no matter what is stacked on top, the fundamental foundation of retail remains the same —pricing.
Pricing involves determining what a product or service is worth to a business. It is a core aspect of any business that sells products or services to the market. Effective pricing strategy is essential for continued sales success.
Many factors influence customers’ buying decisions, but the price they pay is almost always at the top of their list. That’s why setting the right prices needs careful thought and strategy.
Managing Your Key Value Items (KVIs)
As a retailer, it is essential to understand how customers perceive your product’s value and price. Key Value Items (KVls) are the products that consumers most often compare prices for, making KVls extremely crucial to a business’s success. KVIs also help you manage your sales objectives, such as turnover or margin and maintain a better balance between them.
Your pricing structure and merchandise selection can be optimised by determining these key products to increase customer engagement and profitability. The first step in managing KVls is to identify the products that have the highest value to your market.
Coming up with a list of your most profitable products can be challenging and time-consuming because there are so many factors to consider such as the competitive landscape, customer preferences, and competitor activity. Once you have identified your KVIs, you’re on your way to creating a winning pricing strategy for your business.
Finding the Pricing Strategy That Works For You
To win over consumers, retailers must focus on smart pricing in order to maximise profits and keep profit margins high. By developing smart pricing strategies, businesses create a better customer experience and increase sales.
In order to come up with a pricing strategy, you should consider your target market, what they are willing to pay, and what your competitors are charging for similar products. In response to factors such as market conditions and demand, retailers often adjust their pricing over time.
Here’s a quick rundown of some pricing strategies your business may look into adopting.
is used by businesses to group several products together and sell them for less than the total cost of selling them all individually.
also known as real-time pricing is a method of setting the cost of your products and services reflecting the market demands at any given moment.
strategy involves setting prices as low as possible to make a small profit out of the business. The aim is to get customers who want to save money.
Market Penetration Pricing
is when a business tries to win customers by offering low prices on its products and services. After establishing a solid customer base, they start increasing prices.
involves creating a high-quality product that customers will consider of high value. Your branding strategy will need to appeal to luxury or lifestyle consumers.
is when a business is setting high prices when they introduce a new product, then gradually lowering those prices as more competitors enter the market.
is similar to premium pricing. Value-based pricing is determined by how much the customer believes the product is worth. It is most appropriate for merchants who provide unique products, not commodities.
For continued business success, make sure your pricing strategy covers your costs and includes a profit margin. These are essential elements of a good pricing strategy.
Offshoring in the Philippines Can Future-Proof Your Retail Business
While shopping in brick-and-mortar stores is very much alive, we also need to embrace the reality that eCommerce is changing the retail landscape. Consumers are smarter and do intensive research before buying, especially now that they’re surrounded by hundreds of options that offer competitive prices and convenient payment options. Not keeping up with the demands and pacing of your customer’s journey, could be a fatal mistake for your business.
As the eCommerce market is expected to keep growing, your business should harness the convenience of offshoring in the Philippines early on. As the 3rd largest English-speaking country in the world, the Philippines is known for its abundant labour force, making it an excellent outsourcing location for retailers who are looking to scale their teams and functions in the following areas:
Social Media Support
Back Office Processes
Filipinos are known to be very tech-savvy and digitally forward, making them capable of future-proofing your retail business without significantly increasing your operational cost. With the right team behind you, your business can keep up with the emerging digital trends in the retail industry and leverage this for your growth.
If your business is on the lookout for a reliable support team, outsourcing customer service, sales, and other business functions to the Philippines is a smart move. You’ll then have more time to focus on implementing your growth plans and making necessary strategic actions to keep up with the market.
Satellite Office is Your Expert Offshore Outsourcing Partner
Having the right offshore staffing partner in the Philippines can significantly improve your operational efficiency, reduce your operating costs, and accelerate your growth… Satellite Office has a proven track record of assisting retail businesses to leverage the benefits of outsourcing by building them a dedicated, highly skilled, and cost-efficient offshore team in the Philippines. We partner with retailers to help them tackle the talent shortage and future-proof their business through significant cost savings coupled with operational improvements.
Our tailored offshore outsourcing solutions give businesses full control of their remote team’s productivity, output quality and targets, while we provide comprehensive support that makes managing offshore employees as simple as possible.
Don’t get left behind, let Satellite Office help you with your business goals. Contact us for a free assessment.