Retail is defined as “the sale of goods to the public in relatively small quantities for use or consumption rather than for resale” according to Google. And such a sales format was relatively simple until recent years. People had a few choices. Everybody would have a handful of retail stores around them, which they could choose from, and most people would visit the stores nearest to their homes. But that has all changed since the advent of online retail stores doing doorstep delivery.
Since online retailers do not need to spend huge amounts on rents of large showrooms in major parts of the city, they can give steep discounts to customers. However, due to multiple players in the market, the pricing of products are extremely dynamic and websites keep competing with others. Even a difference of $1 may result in a conversion. Due to this reason, sometimes e-commerce retailers sustain losses on some items while trying to make a profit on others. This results in large losses, even though revenue increases multiple times.
However, the competition reaches a peak during the holiday season, such as Christmas and Easter. This is when different websites offer different perks for shopping at their website. So here are some tips that you can use to price your products competitively so as to sell most of the products while making a profit and ensuring that your brand is a hit during the holiday season.
A good time to launch. Most companies offer best discounts during the holiday season, or right after they launch. However, if you launch in the holiday season, you can actually do both at the same time. This will save you money, while you can get hold of a lot of customers, looking for best bargains. If you launch in the Christmas season, you can also spend some money on initial advertisement, or pull off a PR stunt by having people dressed as Santa Clauses distributing cakes and leaflets of your brand, throughout the country. This will get your site, a lot of visitors since people are more likely to check out a new retail site during the holiday season. The campaign, though cheaper as compared to most, will make you popular among the crowd and give you an opportunity to introduce people to your website, and serve as a launchpad for your company.
It is important to know your margins. Some retailers have tie-ups with certain brands and can sell those brands at a lower price, where they have an agreement to sell at least a specified amount of each product of that brand. In case you are facing such a situation, where a competitor does have a brand on his site, do not undersell just to get some temporary customers. Instead, do something smart. Like price every other brand’s products in that segment at a competitive price by lowering margins slightly. You can make use of price monitoring service to build product catalog of the competitors and get detailed pricing data.
This will give you an edge since people want diversity and will tend to view products of multiple Brands in any sector. Someone might have a tendency to buy Lakme Shampoo, someone might prefer L’Oreal. You never know. Underselling is never good in the long run. If you undersell some products during the holiday season, and they are a hit with the public, remember that as soon as you increase the same product’s price heftily, later on, your customers will leave. Also, due to the mass sale of the undervalued products, you will end up losing cash and will be at the mercy of shareholders. This is what happened with a unicorn startup SnapDeal in India. When you are not able to price one item lower than other competitors, forget it and focus on other items. It is impossible, that you will always get items at lower prices that all others in the market. Let them sell what they get at best rates, and focus on what you get at the best rates.
Introduce new local brands to the online retail crowd. People are used to buying certain brands only from physical stores. Often these stores might be small local shops that sell their home-made products, that are a hit in the neighborhood. Introduce these products to a larger audience in the holiday season. No matter how many choices a customer has, remember that one more will always make him happier. So this will give you an opportunity to tie up with local businesses, where you will not be having any other competitors, and can actually keep a larger margin, as compared to products from Multinational Brands that everyone is selling. You can go into agreements with these local shops. They will be reaching out to a larger crowd and growing their business, while you can get the sole right to sell their products online.
Offer rewards and host fun activities on your website, that people can enjoy during the holiday season, which set up the mood. For example, have a lucky wheel on your website that customers can spin every few hours. It will give one out of every ten or twenty new customers, a hundred dollar coupon, that he can use when he buys anything above a thousand dollars at your website. This will have multi-fold results. More and more people will visit your website, expecting to get some discount coupons. During these visits, they will see more apparel, electronics, household items, and targeted advertisements that will make them buy a thing or two. The discount coupons will also make the receivers buy something believing that the discount is a once in a lifetime offer and they can actually get something at $100 off. What they forget is that they will actually be shelling out at least $900. So have such games or “solve the puzzle activities” or interesting advertisements, that will make the customers visit your website more, and buy more so that you can reach out to more and more people.
Advertisement is a lot of money right? What if I tell you that you can do it for free through word of mouth? Well, there is a way. And the way is referrals. Increase rewards by two, for referrals that get converted during the festive season and offer something like a laptop or a smart-watch to the person who is able to be the person with the most conversions on referrals. This will cause people to refer more, and the thing will branch out like a tree, and as more people get to know about it, they will get even more people in the loop and this way your website will get a lot of traction during the holiday season.
Put yourself in the shoes of the customer and think what you would have wanted online retailers to offer during the festive season. Free cakes with all orders above a hundred dollar? Or a Santa Claus toy for every twenty-fifth customer? Think hard and come up with a unique USP for this holiday season, because unless you think really out of the box, and actually lure your customers to your website, you’re not gonna be able to make the most out of this Holiday Season.