E-commerce, brick and mortar retailers, in-app purchases. These multiple touchpoints present a huge opportunity for your company. Omnichannel marketing, defined as the ability to seamlessly market products and services across all customer channels, is how companies are approaching this opportunity. After all, shouldn’t more channels simply present more opportunities to sell?
Unfortunately, the answer isn’t so straightforward. Among the many challenges to omnichannel selling is pricing. Does your company price goods the same across every channel? What tools can you leverage to confidently develop pricing strategies?
These are the questions we tackle in this post, so let’s get started.
What are the challenges to omnichannel pricing?
Regional differences of customers
Multi-national companies have customers from various regions and nations. These customers are bound to act differently for many reasons. Regional differences in climate and seasonal weather, for example, will impact the sale of seasonal goods for retailers. Cultural or customary differences may affect their attitudes toward different products.
These nuances may drive you to price differently across regions. The challenge is to balance these differences and still hit (or exceed) margin and profit goals. Can you offset a price decrease in one region with an increase in another, for example?
Pricing against your competition
No matter your industry, it’s likely that each of your competitors acts differently. Retailers, for example, face competition from both national chains and e-tailers. Multinational corporations face competition from companies that also operate on a global scale.
Every competitor has their own set of advantages and challenges that allow them to price their products and services differently. To combat those that can offer lower prices, you have to build customer loyalty.
Lack of a pricing strategy
Having an effective pricing strategy is key to navigating your customer demand, regional differences and competition. Yet many companies don’t have one in place.
Companies may have stuck to the status quo despite available pricing data and predictive analytics tools available to them. They may not know how to link pricing strategies together across their channels. Or they may lack the technological capabilities to aggregate all their data to perform pricing analyses.
Deployment of the right pricing solution
Many companies are turning to new solutions to create strong pricing strategies. Yet for many, they have to face the challenges of not only finding the right solution but deploying it effectively.
This may stem from the fear of making mistakes that could cost the company money. Or they may face pushback from organizational leaders that aren’t on board with new solutions.
With the right solution, you can benefit from omnichannel pricing
Despite the challenges to omnichannel pricing, companies can, and already have, deployed successful strategies. To do the same for your company, keep the following tips in mind.
Understand not all omnichannel pricing strategies are the same
Omnichannel pricing doesn’t necessarily mean you should price your products the same across every channel. Instead, it means thinking strategically about how to get the most out of each channel.
There are three basic strategies for omnichannel pricing, which include:
- Uniform pricing, where all products are priced the same regardless of channel.
- Channel-specific pricing, where products are priced differently according to channel.
- Hybrid pricing, where pricing varies depending on product and channel
Keep in mind that deciding on the right strategy requires the right data. You should have, or should start gathering, the following:
- Customer shopping habits
- Customer behavior before and after pricing changes
- An understanding, but not necessarily following, of competitor pricing behavior
- An understanding of the importance of products to your customers
To maintain a competitive edge, a dynamic omni-channel pricing strategy requires advanced analytics and machine learning algorithms. A shift in sales from store to online requires a shift in pricing and promotion tactics. Predicting the lifecycle of the newest trend in products via machine learning to adapt pricing accordingly is imperative. Most importantly, dynamic omni-channel pricing means, breeding a culture of listening to your customers and testing and learning so wins can be applied quickly.
Focus on what’s best for your company
Your strategy shouldn’t be driven solely by the actions of your competitors. This reactionary strategy can lead to pricing decisions, such as massive discounts, that will hurt your company in the long run.
Instead, start off with getting a solid understanding of your own customers and your own competitive advantages. You should turn to the wealth of pricing data available to understand the core economics of your products, such as price elasticity. Or use sophisticated AI and Machine Learning models to predict the spending patterns and product needs of your customers. Again, the right pricing strategy for your company should be decided based on information derived from a dynamic and intelligent pricing solution and the inclusion of the human element. That element being the application of business guardrails and outcomes to these AI and machine learning modes.
Find the right solution partner for your company
Of course, your enterprise doesn’t have to develop an omnichannel pricing strategy alone. Companies like Antuit are experts in developing advanced analytics strategies and solutions to help you develop the right pricing strategies for your products and customers.
The right omnichannel pricing strategy can yield big gains for your company. Without this information, you’ll continue to struggle with your pricing strategy and second-guess your decisions. In today’s information age, that’s something no company should settle for.
See how Antuit enables you to predict and measure how pricing levers will impact your demand, revenue and margins.
