The goal of an omnichannel brand is to provide customers with a seamless shopping experience across channels. Ideally, this would include having uniform pricing across ecommerce and stores. However, depending on your business, a different pricing strategy might make more sense.
Below, we cover pricing strategies for omnichannel brands. We also dive into how a flexible order management system (OMS) is a necessary tool for supporting the omnichannel pricing strategy that you choose.
Approaches to Pricing for Omnichannel Brands
There’s no doubt that price influences consumer buying behavior. In fact, it is one of the top factors in a purchasing decision, next to product quality and experience. Needless to say, your pricing strategy is critically important.
When choosing an omnichannel pricing strategy, you’ll want to consider your competitors, the channels you sell through, and how your customers tend to interact with your brand.
Read on for three different pricing strategies.
Omnichannel pricing is where pricing stays the same across all channels. The main advantage of consistent pricing is that it can enhance the customer experience. It does so by instilling confidence in your shoppers, particularly if they tend to shop across channels. With this trust comes loyalty, which can result in higher lifetime value customers and increased worth of mouth.
Having consistent pricing also reduces the risk of alienating customers who would be turned off to see they will pay more, for instance, online than in-store. And you definitely run this risk if you offer fulfillment options such as buy online pickup in-store (BOPIS) or if your customers are doing their research or using price check apps.
If retaining customers and driving loyalty is a central part of your business strategy, omnichannel pricing may make the most sense for your brand.
Channel-specific retail pricing strategy involves setting different prices across channels.
This strategy is often used by brands that want to have promotions on certain channels. For example, a store could have an item for sale at full-price in-store but offer a 20% discount price on the same item online.
The channel-specific retail pricing strategy is usually most effective for brands that have customers who tend to have pretty straightforward shopping journeys and don’t spend too much time researching or shopping across channels.
The advantage of being able to utilize channel-specific pricing is that you will be able to increase your profit margins on certain channels. However, as previously mentioned, you run the risk of alienating customers who get annoyed by your inconsistent pricing.
For brands that don’t want to commit to either a channel-specific or omnichannel pricing strategy, there’s a third option—combination or hybrid pricing.
A combination pricing strategy is when you generally offer the same price across all channels but with a few exceptions. For example, you might send your customers a text message or email with a discount code to incentivize them to revisit an abandoned cart online.
You might also want to engage in combination pricing if you have a loyalty program. Specifically, if you have a mobile loyalty program on your consumer app you might offer your customers the ability to unlock different loyalty stages leading to special discounts. These lower prices would only be offered to customers who have the consumer app thus making the price on the app channel different from your other channels.
Pricing with a Flexible Order Management System
As more brands adopt an omnichannel approach, and you continue to face increased competition, you need the right technology to ensure you’re operating efficiently and are able to deliver a great customer experience.
A flexible order management system is critical for succeeding in today’s retail environment. An omnichannel OMS enables you to track all of your inventory and orders in one place, allowing you to increase your margins or reduce prices.
With an omnichannel OMS, you can learn more about buying behaviors and scour purchasing history to determine how customers are interacting with your brand. For example, what channels they are using and what they are buying. This information will be key to have when deciding on a pricing strategy.
Additionally, a flexible order management system with advanced pricing capabilities will enable you to employ:
- Markdown pricing: use markdown avoidance routing to save lost margin
- Variable and flexible pricing: offer special prices for select people, like VIP customers and employees, and easily mark down prices on old inventory while making room for new stock
- Price overrides: allow your store associates to correct pricing
Omnichannel Pricing Made Easy with NewStore
An outdated legacy OMS that doesn’t integrate your channels will not cut it. You need a flexible OMS to support your omnichannel pricing strategy so that you can deliver a great customer experience.
Learn more about our cloud-based order management solution.