In today’s eCommerce landscape, it can be hard to decide what sales strategy works best. Do you want to drive traffic to your own website...
1. Setting the stage for Black Friday/Cyber Monday
You can be sure shoppers already have sussed out the types of bargains they’ll be targeting this year. Because of this, you need to do your research and review your past performance to determine where you think you’ll see the best profits during this highly competitive season. Even if you have a strong online presence, keep in mind that 77% of shoppers said they planned to shop in-store on Black Friday last year. So, your strategy has to include both a Cyber Monday and Black Friday strategy. Consider the challenges consumers face today and plan now to lessen those issues, including:
- Early depletion of inventory
- Missed shipping deadlines due to supply chain delays
- Longer ship/wait times due to supply chain delays (think same day and next day deliveries might be harder to promise)
- Product shortages on your own shelves due to shipping delays
- Inflation impacting your production costs
These issues impact both online and in-person shopping. Although marketplaces like Amazon gained from the pandemic the past two years, now that things are back to a sense of “normal,” your brick-and-mortar competition is back. All these factors will impact your pricing strategy and the types of discounts you are willing to offer to win your fair share of holiday sales.
2. What is price optimization?
Price optimization analyzes customer and market data to identify the optimal price point for your products. Your goal is to determine the sweet spot that will stand out from the competition and attract more customers without sacrificing profits when you maximize sales. There’s quite a bit of data required to get your prices optimized, including:
- Customer surveys based on expectations and behaviour
- Demographics, but more importantly, psychographic data
- Historic sales data
- Your operating costs
You should also have a clear understanding of your customer lifetime value and related churn data. While this research takes time, it is worth the effort for major events like Black Friday and Cyber Monday. It’s the best way to remain competitive and profitable.
3. How do you decide what to discount?
It’s all about determining:
- The desires of your customers
- The value of your products
- The minimum amount required to turn a profit and
- The price people consider a good price vs a great price when they are hunting for deals
For desire, you need to understand how each product is selling and why. What sets your top sellers apart from the ones that don’t sell as fast or, in some cases, at all? Keeping track of your stock and inventory tells you where each product sits on the desire scale. However, it also tells you where prices appear to offer value since people are willing to spend that amount more often. Your low inventory tells you this.
Also, you might consider a pricing strategy based on one, two or three outstanding, unbeatable offers to draw in customers and then back those items up with assorted discount levels that encourage further sales. The challenge here is having a reliable product data source that shows you real-time numbers to make accurate pricing decisions.
4. Use product information to optimize pricing
So, what is the easiest and most effective way to leverage your product data to optimize pricing successfully? Centralize it. Centralized product information using an effective product information management system (PIM) enables you to automate processes and access information as it’s required. With a PIM system, everything is easier to review based on peak seasons. As a result, you can better understand what deals performed best based on past holidays.
You can spot trends such as the highest sales, the types of items that seemed to get abandoned in carts, and how well your suggested purchases worked to encourage increased cart sizes. This information helps you leverage up or cross-sell opportunities. You can consider having a few deep discounts that drive customers to your site or store, providing a jumping-off point for an increased basket.
You can even review things to enhance your product descriptions and online marketing strategy such as the phrases used for the highest-selling items. All this information points you in the right direction to optimize pricing, increase conversions and see the best sales you’ve ever seen in the peak season.