What’s the first thing customer’s do before they purchase a product? They look at pricing. While having a strong brand and reputation helps with their purchasing decisions, your pricing strategy is also crucial.
The goal is to find a strategy that provides pricing meets your customers’ needs. This is where dynamic pricing comes in – a common strategy used by retailers.
What is dynamic pricing?
Dynamic pricing is the process of setting and fluctuating your store’s prices over time. You do this based on a variety of factors including trends, demand, and market conditions.
The benefits of dynamic pricing
Using the pricing strategy could help increase profits throughout the year – even during a slow season. Other benefits include:
Maintaining a competitive edge
Regardless of what changes occur or the evolution of the industry, adopting a dynamic pricing strategy will ensure that you’re ahead of competitors – and attract more customers.
If you’re having a slow sales month, using a dynamic pricing strategy could help increase sales. For example, you could offer a discount on your bestseller or free shipping if they spend a certain amount in your store.
You can create a high level of demand
if you’re in the hospitality industry or offer events, dynamic pricing may increase awareness and demand. How? Offer a discount or lower price within a limited period.
More importantly, you’ll get valuable data when it comes to your customers’ purchasing behaviour. Implementing a dynamic pricing strategy will provide you with insights regarding how much your customers are willing to pay for a product.
How to implement dynamic pricing
Divide your products into various tiers and assign them different prices. Apple’s 5S and 5C phone series is a good example of this. Another example is news sites that offer premium content.
This is one of the most popular strategies used by online retailers. If the demand for an item is high, then you should set the price high. If the demand is low, then the price should be decreased.
This means changing the price of the product according to the time of the day or longevity of the product. For example, if you experience the best traffic during the morning, offer discounts during this time.
Use this tactic if you’re launching a new product and you’re uncertain about how well it will be received. With this tactic, you should analyze the market trend and adjust your price lower than your competitors.
How to install the plugin
The Dynamic Pricing plugin is simple to install and use. It contains the following features:
- Advanced product pricing
- Simple category pricing
- Advanced category pricing
- Simple role-based pricing
The features available on this plugin will let you create an advanced product, category and role-based pricing.
The advantage of using this plugin is that it is not a third-party plugin, and you can configure rules like:
Examples of this will include:
- Give a 10% discount to customers when they purchase four or more products.
- Give a discount to subscribers if they purchase between 2-5 of your store items. Give them a bigger discount when if they purchase more than 5.
- Offer a 5% discount to everyone else and a 10% discount to premium customers.
You also get a 30-day money-back guarantee if you’re unhappy with the purchase.