Retailers need to rethink pricing strategies
The National Retail Association (NRA) said last week’s Commonwealth Bank’s Retail insights report should act as a wakeup call for retailers when developing pricing strategies, particularly as the industry heads into the busy Christmas and New Year period.
NRA CEO Dominique Lamb said it’s important that retailers understand the shopping behaviours of their consumers when they set their pricing strategies.
The report demonstrates that there is no one-size-fits all approach when it comes to pricing strategies for retailers.
“It is quite clear from the Retail Insights report that different consumers are influenced by different motivations when it comes to factoring in price to their shopping habits,” said Lamb.
“The CommBank report suggests that some shoppers are enticed by price promotions, while other consumers may be turned off by discounted prices due to a belief that higher priced products are of a higher quality.
“The research also shows that frequent sales promotions can raise the expectations of consumers and result in them refusing to pay full price.
“It’s important that when retailers are devising their pricing strategies, particularly during the post-Christmas sales period, that they carefully consider the impact that a price tag may have on the choice shoppers make.”
Lamb said that by implementing an effective pricing strategy, retailers can ensure that they cater to their target market, and in the process drive higher sales among their customers.
“It’s important that all retailers consider both the short-term and long-term impacts that a pricing strategy may have on sales and the way in which consumers view their product.