4 Holiday Pricing Strategies Retailers Can Learn from Prime Day

This summer’s slow retail season was an open opportunity for bigger brands on the innovation front — and one in particular took serious advantage. Amazon redefined Christmas in July sales with the launch of Prime Day, exceeding its own Black Friday benchmark by 18% and selling 226% more than the same day last year. Although the deals might not have been what most shoppers were hoping for, Amazon set the bar high for the fast approaching holiday season and offered a few take-aways from which businesses of all sizes can learn.

Now, the holiday shopping season is right around the corner and it is time to finalize marketing campaigns, pricing and merchandising strategies for the most important selling season of the year. To help you compete alongside a pack of big box brands, we’ve gathered a few tips rooted in summer selling trends that proved successful, as well as Amazon’s Prime Day success.

1. Clear Inventory with Focused Sales

Though Amazon’s Prime Day was successful, many of the items promoted were likely discounted because they weren’t selling well anyway. If you have items that have been collecting dust in your warehouse, consider discounting them or even offering them as free gifts with orders that include your higher margin products. This will serve as a surprise and delight tactic that helps to win over customer loyalty, as well as get rid of slow moving inventory.

2. Realize that Pricing is Relative

Your prices matter, but only in relation to your competitors. Aside from those few unique products native to your own store, your sales are highly dependent on how your prices compare to larger brands and what value you’re offering for that price.

Be constantly aware of your competitors pricing and prepare to reconsider your strategy at any point. If you don’t have the bandwidth to consistently scan competitor sites, install an automated app which can do it for you.

Also, consider how your brand adds value to the overall customer experience and justifies a higher price. Are you offering increased customer support, a better delivery experience or personalized notes? What makes your experience standout when you are selling similar products as your competitors?

3. Space Out Sales for a Longer Holiday Season

Succeeding during the holiday shopping season is for long distance runners, not sprinters. No longer does shopping start after Thanksgiving. Last year, Amazon started their holiday sales the day after Halloween, while 29% of consumers began shopping before November. In fact, in 2014, consumer spending in October outpaced those in December by nearly $900.

Use well-timed sales to make it appealing for consumers with diverse shopping habits to check out your store. Begin as early as October and run campaigns throughout December to catch any late-comers.

4. Optimize Inventory Early

Prime Day showed Amazon’s ability to command sales and build buzz without the calendar dictating the timing of its campaigns. Despite this, the limited quantity of top products proved to be a frustration for customers. While advertising deals with a limited quantity can be a great way to create a sense of urgency, it might also damage customer sentiment toward your brand.

This holiday season, retailers that hope to learn from Amazon’s Prime Day should be sure to stock enough of the items shoppers really want. Stay up to date on Google Trends and other industry-specific reports to be prepared for holiday wish lists. Take advantage of the long holiday season and consider reordering a product if you realize it is resonating well with shoppers. The main takeaway here is to stock up early and reevaluate constantly to make sure you aren’t left with too much come December 26, or worse, run out of inventory before December 15.

In all, don’t finalize your holiday planning without looking back at this year’s industry trends as well as your own wins and losses. Follow Amazon’s Prime Day example and build awareness for your holiday promotions well in advance to fuel demand generation and site traffic.

Prepare for your larger competitors to implement aggressive pricing strategies and consider how your brand can offer additional value to the customer experience, without hurting your margins. Finally, be meticulous in your inventory management and stock levels.

 

http://blog.bigcommerce.com/4-holiday-pricing-strategies-retailers-can-learn-from-prime-day/