You like dynamic pricing, you fully understand its value to your online establishment and you stay on top of all news related to dynamic pricing. You use a repricing solution to allow you to truly have dynamic pricing. Your mom likes dynamic pricing (OK… she may not know what it is, but she likes it because you talk about all the time and she knows it’s important to you). However the real question is, do your customers like it?
Dynamic pricing is responsive from a supplier side in the sense that pricing adjusts based on marker triggers you set; a single customer will have little real impact in causing pricing shift. Customers are likely much more interested in pricing that responds to them specifically – namely flexible pricing. Flexible pricing is designed to adjust to a specific targeted shopping demographic. So shopper John, who is a frequent shopper will automatically receive discount “x” at checkout, and shopper Bob who has never been to your store before will not. According to The Curve Report, over 75% of 18-49 years olds (Gen X and Gen Y) would be interested in trying a flexible pricing model. Of the nine pricing models proposed, the one that garnered the most support (at 36%) was having shopping history playing the pivotal role in deciding how much of a discount a purchaser would receiver. Shoppers with more purchasing history would receive larger discounts.
Here is a brief rundown on how the remaining top five flexible pricing models stacked up:
- Price matching (32%) – customers decide what they want to pay and wait for a retailer to match their price. Price matching may happen instantly, in a day, a week, a month, or never
- Online interactivity (26%) – The more interaction a customer has (sharing on Facebook, tweeting, watching a YouTube video), the greater the discount
- Expiration date (22%) – The closer an item is to expiring the cheaper it gets. This model is used fairly often in supermarkets, but the focus is often on a “fire sale” right before something expires rather than a gradual shifting of price over the shelf life of the product
- Commercial Credit (21%) – The more commercials for a product a customer watches, the greater the discount
Additionally, according to the The Curve Report, a full 80% of Gen X and Y-ers identify themselves as bargain shoppers who value price over convenience. These shoppers are willing to actively research the pricing of an intended purchase and shop around until they find their ideal price point.
Flexible pricing can be about more than just a discount on a specific product. Kapture is an app that rewards users for sharing pictures of “moments” on social networks. The app allows brands and businesses to have anyone become an ambassador, and offers instant rewards such as discounts or free products. Kapture has signed up over 300 merchants in New York City and is seeking to capitalize on the millions of photos already being shared via social networking. This is one example of flexible pricing that is “out of the box” based on conventional methods currently being used. As customers become ever more savvy, aware of all of the choices they have and the speed and ease with which they can seek out alternate options, flexible pricing will need to constantly adapt, finding new ways to attract customers’ attention and keep it.
Dynamic pricing with flexible pricing can be an incredibly powerful combination for your online store, allowing you to reap benefits from both sides of the aisle. As a retailer, dynamic pricing allows you to effectively compete and boost your revenue based on market conditions. Flexible pricing allows you to appeal to shoppers on an individual level, with pricing tailored to their specific needs. Put them together, and take your online store to a new level and to a completely different playing field.