Dynamic pricing has flourished since the rise of the online economy, making it easy for retailers to adapt to market demands in real time. The magazine Business Week predicted this trend back in 1998, stating that, "Suddenly, marketers can communicate directly with prospective buyers, offering them targeted promotions on an individual basis."
While prices seem to change at dizzying speeds day after day, several factors still influence the ultimate value and pricing strategies used for specific items. Here are some factors that you need to consider when assigning the prices across your product line:
Markets that heavily depend on seasonality (fashion, produce, holiday products, back-to-school) must balance between streamlining their inventory during the off-season, and handling the influx of transactions during peak periods. Because of the unique properties of seasonal products, it's more appropriate to evaluate their performance year-to-year instead of comparing every month or every quarter.
Opt for a pricing strategy that uses different metrics for the most hectic selling periods and the months in between. You can create a special off-season price list for your seasonal items using the inventory module in Connected Business.
Behavioral economics is a field of study that can shed some light to how consumers consciously and subconsciously react to pricing schemes. Gregory Ciotti on the Huffington Post Blog lists some academic studiesthat can give some insights into why certain pricing schemes perform better than others.
Connected Business has a powerful Rounding Rules feature that allows you to globally apply rounding rules on top of your wholesale or retail pricing schemes. You can experiment with pricing standards through different periods and different market segments to find out what is best for your business.
Newsworthiness and Virality
Seasonal calendars are more or less predictable in their performance, but sometimes certain products break out and unexpectedly become in demand. This year, the infamous color-changing dress sold out when it became a viral sensation.
Having a fully integrated Inventory database such as Connected Business gives you the ability to respond to market demands in real time. You can price individual items to capitalize on news items and then advertise through your social marketing streams.
Connected Business makes it easy to apply flexible pricing for all your selling channels. Discover how you can make the most out of your inventory today.