Lower prices are not enough of an incentive

Lower prices can be a crumbling cliff of a strategy. You might be able to hang on for a bit, but eventually you'll slip without a better handhold.

No matter the price, someone will always go lower. Even if you have your own brand of merchandise, competitors can undercut you enough to cause damage.

For consumers, though they'll always love to pay less they also know that ultra-low prices are signals of poor quality. If you charge half of what a competitor does, their first response will be "why?"

Figure out other product benefits or incentives and you don't need to reduce prices. Maybe your version packs in more vitamins or is easier to travel with. Not every customer will care but those that do would even pay a price premium for those benefits.

If all you have are low prices and you can't modify the product itself, you're forced to do something on the service side. Faster shipping, better service, easy buying experience, etc. Just be ready when a competitor moves into that space too.

Eric Davis

See how the month a customer orders will change their behavior

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Topics: Pricing Merchandising

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