“As a small business, you should not differentiate via the price only,” warns German-based pricing expert Sara-Marie Gansert. “Find something that makes you unique to your customers. And try to create some loyalty based on that.”
Locate2u sat down with Gasert to discuss tips and best practices around pricing your products right this festive season.
With the Christmas preparations in full swing, it’s also essential to look at promotions, sales, and added value to convince customers your product must go into the stocking. However, customers are still budgeting continuously, so careful planning must go into this.
Preparing for the festive peak
“You should be prepared. Ultimately, the price is part of the heart of the business. There is a peak season upcoming. You want to ensure you are prepared for that [Christmas and Black Friday],” says Gansert.
There is a high transparency in online business compared to in-store shopping. “On one hand, it makes it easier for businesses to compare prices to their competitors, but at the same time, it also makes it easier for their customers to compare the prices,” says Gansert.
When it comes to in-store shopping, the competition is not that harsh. “Because people are probably not going to five different stores to compare the prices, but that’s what they can easily do when shopping online,” explains Gansert.
Change in shopping habits
Inflation is easing, but is it enough to change shopping habits ahead of Black Friday in November and Christmas in December? Gansert has noticed people have been more cautious in spending money over the last few months, and it is natural that business is picking up again towards the end of the year. “This might have an easing effect on the businesses in general. Regarding targeting customers and price promotions, there would probably be a huge difference when it comes to that.”
However, business owners still need to focus on some essential items to put promotions on to increase visibility. “But still make sure that you are not starting to go into a pricing spiral or risk your margins too much,” says Gansert.
Transparency is the biggest challenge
“The high transparency that we have in the market has been singled out as one of the biggest challenges the e-commerce industry faces. It’s becoming more and more easy to compare prices. If someone is looking for the lowest price for a specific product, it is straightforward for them to search for that. There are a lot of engines to help with that. You can even compare shipping costs. This, of course, drives competition. This makes it hard to keep the prices up at some level if you want to be competing,” says Gansert.
Adding value to the customers’ experience is vital. “How you are addressing the customer. How you are shipping and sending your parcels in general. This is a way of bringing value, which is not via the price, which is key for smaller businesses,” says Gansert.
Black Friday strategy
Gansert warns that it’s best to put some items on sale, but choose wisely: “The very good deals on Black Friday are not as many as you’d think, based on the marketing that is done. You can participate in Black Friday without losing too much margin. Make sure, especially as a smaller business, you have some key products you target. You want to be visible on Black Friday. It’s about generating some traffic,” she concludes.
About the author
Mia is a multi-award-winning journalist. She has more than 14 years of experience in mainstream media. She's covered many historic moments that happened in Africa and internationally. She has a strong focus on human interest stories, to bring her readers and viewers closer to the topics at hand.
