Price sensitiveness

Price sensitiveness

Pricing in ecommerce and retail businesses is a complex and ever-evolving aspect of running a successful operation. One important concept to consider is price sensitiveness or price sensitivity, which refers to the degree to which customers are sensitive to changes in price. In other words, it measures how much a change in price will affect a customer’s purchasing behavior. Understanding price sensitiveness is crucial for businesses looking to optimize their pricing strategies.

Price sensitiveness can vary greatly depending on the type of product being sold and the target market. For example, customers may be more price sensitive to necessities such as groceries, while they may be less sensitive to luxury items like a Rolex watch. Additionally, customers in different socioeconomic groups may have different levels of price sensitivity. Understanding these factors can help businesses tailor their pricing strategies to maximize profits while still satisfying customers.

One approach to assessing price sensitiveness is to conduct surveys or market research to gather data on customer preferences and behavior. This data can be used to create models that predict how changes in price will affect sales and profits. Additionally, businesses can analyze sales data to determine which price points are most effective for their products, and make adjustments as needed.

Another important factor in considering price sensitivity is competition. In markets with many competitors offering similar products, customers may be more price sensitive and businesses may need to be more aggressive with their pricing strategies in order to remain competitive. On the other hand, in markets with fewer competitors, businesses may have more leeway to set prices that are less sensitive to changes.

In addition to these factors, there are a number of tactics businesses can use to manage price sensitivity, including bundling products, offering discounts, and creating loyalty programs. By understanding price sensitivity and using these tactics effectively, businesses can optimize their pricing strategies to drive sales and increase profits.

Price sensitiveness of ecommerce and retail pricing 

Understanding price sensitivity can impact the pricing practices and approaches of ecommerce and retail businesses in the following ways:

  1. Price elasticity: Businesses can use data on price elasticity to determine how sensitive consumers are to changes in price. This can inform pricing decisions, such as setting prices at a level that maximizes profits.

  2. Price anchoring: Businesses can use price anchoring, where they set a higher price for a product and then offer a discounted price, to create the perception of a better deal for consumers.

  3. Value-based pricing: Businesses can use value-based pricing, where they set prices based on the perceived value of the product to the consumer, to appeal to consumers who are less price sensitive.

  4. Market segmentation: By understanding price sensitivity, businesses can segment the market and create different pricing strategies for different groups of consumers.

  5. Promotions and discounts: Businesses can use promotions and discounts to appeal to price-sensitive consumers.

  6. Quality vs. Price: By understanding the price sensitivity of consumers, businesses can make decisions about the trade-off between quality and price.


Price sensitiveness refers to the degree to which consumers are affected by changes in price when making purchasing decisions. In ecommerce and retail businesses, understanding price sensitivity can impact pricing by using data on price elasticity, price anchoring, value-based pricing, market segmentation, promotions and discounts, and understanding the trade-off between quality and price. It is crucial for businesses to understand the price sensitivity of consumers in order to make informed pricing decisions and appeal to different groups of consumers. Assessing price sensitivity through surveys and market research, analyzing sales data, and considering competition are all important factors in developing effective pricing strategies. Additionally, businesses can use tactics like bundling and offering discounts to manage price sensitivity and optimize their pricing strategies.