Mobile devices are becoming more popular
At first, the rise of mobile devices and the importance of pricing might not be related. They are, however, as related as they can be. With mobile devices becoming more affordable and powerful than ever, they now play a big role in most people’s lives. And your customers are no exceptions.
A few years ago, comparing prices was not easy and as a result, it wasn’t worth the effort in most cases. Walking from one store to another to check how much the same product is being sold for was simply a waste of time. But now, a full price comparison is a few clicks away for most consumers. Not to mention that all we need is a smartphone to compare prices between different stores. And that’s particularly true for an ecommerce business, as people can compare prices and purchase products online.
BIG ecommerce companies are driving prices down
Big ecommerce companies —like Amazon and eBay— are becoming so powerful in a way that makes it increasingly hard for smaller online retailers to compete. These giants have the resources to make the competition tougher in so many ways for any small/midsize online retailer, especially in terms of pricing.
Also, these retail giants offer cheap or even free shipping as well as deliver their products to almost anywhere. This makes pricing even more important if you want your products to stay relevant.
Competition is no longer location-based
In the good old days, retailers faced local competition. If you were a retailer 10 years ago, you only had to keep an eye out for competitors working in your area. Other retailers who don’t operate nearby aren’t considered “direct competition”, and aren’t after your loyal customers.
Nowadays though, things have changed. Your competition is all similar products that people can order online after a quick Google search. So, you need to keep an eye on all competitors, and ensure that your prices can hold up to what they’re offering.
Privacy awareness is on the rise
Since social media became mainstream, people’s awareness towards the importance of online privacy has been on the rise. A few years ago, people were happy to share lots of personal information online. With this change in online customers’ behavior, targeting them with ads is becoming more difficult and as a result, more expensive.
If privacy awareness continues in the same direction in the upcoming years, pricing will become more effective than ever for online retailers. You’ve got to have a price that’ll hold its ground in a comparison with similar profits, without hurting your profitability.
Super-fast shipping is becoming the norm
Since Amazon is such a dominating force in the ecommerce world, shipping has been the weapon of choice for many online retailers. If our competitors are selling the same product for the same price, we’ll outperform them by shipping it faster, and cheaper.
At first, free shipping was a jaw-dropping deal that wowed people. Now, it’s something that many consumers expect by default. So, the focus has shifted to shipping speed. It started with next-day delivery, and now, 1-hour deliveries are becoming a thing. As people are getting used to fast and cheap —even free— shipping, you’ll need to figure out a way to keep up.
Technology has revolutionized many fields in the past few years, and ecommerce pricing is no exception. In today’s highly competitive market where people can compare prices online in a heartbeat, you must put more effort —and use the correct tools – to set the right prices for your products.
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