'Net Features : pricing

Divergence in Pricing Online vs. In-Store

Pete Prestipino — Tue, 21 Jun 2011 05:30:00 GMT

In a follow-up to its 2010 study on online versus in-store pricing, Anthem Marketing Solutions today released a report showing that items with prices below $15 were generally cheaper in store, while those priced above $15 were generally cheaper online. As the brick-and-mortar and pure-play Web worlds increasingly intersect, this information can prove useful

The data reflects a divergence from the Fall 2010 study according to Anthem, which found that items below $50 were often cheaper in-store, where as those above $90 were more commonly priced lower online. Anthem’s recent study still concluded that an item’s price tier, category, complexity and usage type actually better predicts which channel will have the lower price.

Understanding the forces driving consumer behavior is critical for optimizing channel pricing. “In order to ensure profitability, more enticing and convenient shipping deals need to be enacted for these lower priced goods to compete with the immediacy of in-store purchases, and fewer items being delivered to physical stores could allow for re-allocation of profits to shipping companies, warehouses, and manufacturers,” according to the official statement.

“Physical stores may also see a benefit of increasing the online profitability of low-priced items, as fixed costs may be lessened due to a reduced need for store space as well as an increased focus on only stocking items that are most likely to be purchased in-store, such as convenience goods.”

Get Smart: Competitive Pricing Intelligence

Pete Prestipino — Fri, 27 May 2011 00:30:00 GMT

When you know what your competition is doing it makes decision making for your own enterprise easier. There are a variety of solutions available on the market currently including ChannelIQ, Gazaro, and Vendavo but Ugam Interactive is another and they are making headlines today.

Ugam Interactive released a new version of its Competitive Intelligence Solution PriceTrac® which provides retailers a method of tracking competitors’ pricing, promotions, and product assortments. In its latest release is the “Watch List” feature which allows the user to identify, track, and define alerts on specific products within their own, or competitors’, assortment. The alerts on Key Value Items can be based on business rules defined by each individual user.

“The Watch List feature is yet another avenue for PriceTrac to provide actionable insights into valuable competitive data.” says David Schoenfeld, VP of Sales and Marketing. “For the first time, users of PriceTrac can create user defined lists of products and, in turn, merchandisers and buyers can be immediately alerted when their pricing does not meet strategy on the products that matter most.”

Use Precise Pricing To Entice Buyers

Administrator — Fri, 28 Mar 2008 15:08:00 GMT

I'm not sure when I first heard the price point "$19.95," but something about that combination of letters impressed me - perhaps it was the fluidity the sound those numbers made and the sense of attainability it provided. Apparently, I'm not alone.

via NPR: Researchers at Cornell University say they've discovered something strange about the way consumers absorb price information. They say when the price of an item is in a round number, people perceive it as higher than an odd number. In other words, people think a $3,000 car is more expensive than one priced at $3,129.50. The finding has implications for people trying to sell their homes.

It's easy to see how this can be applied to anything at all - especially the Web. So what's the lesson? Don't round off those numbers - get creative with your pricing and test out various pricing schemas with A/B testing to ensure maximum sales.