Setting up your holiday pricing strategy for your retail store
With not only Christmas around the corner, but big-ticket discount days like Black Friday and Cyber Monday, it becomes necessary for businesses to start pricing their products.For retailers, these are easily the biggest days of the calendar year, and pricing items can prove to be quite a handful given how shoppers love a bargain. Fortunately, your POS solution is tailor-made to handle such occasions and with this year’s season tipped to be the biggest, you’ll surely need it!
Here are some of our favorite tips on how best to set your pricing strategy before the rush begins.
Understand your costs
Amongst the most critical aspects during your holiday pricing bonanza is understanding your costs, regardless of the landscape of the market or your competitors.
This means costs as it relates to purchasing or producing your products, the salary that you spend on staff, storage + equipment costs, and any indirect costs your business might incur. These are all important considerations for when you begin to undertake your holiday pricing strategy. Understanding the minimum price that you can set products, so as to be financially sound for your business, is essential.
Furthermore, examine all the deals available to you from your suppliers for when your purchase large quantities of stock in preparation for the season. Seek out all the avenues presented to you to save money, and gain complete knowledge about your store’s financial position, before you decide to put out any drastic offers for customers to pounce on.
Marketing your best and worst products
As a marketing tool, being able to set retail holiday pricing is a great one for businesses to utilize. It promotes the need for retailers to better sort through their products; finding what their best-selling items are and emphasizing their place within the store.
The flipside of identifying your best-sellers however, is understanding those products that just don’t do well, and making a point to get them in your customers hands and out of your front door. Slashing prices (if it’s financially prudent for the business) can be just the incentive customers need to purchase a product they otherwise might not have glanced twice at.
Selling those slow-moving stock items as a bundle (or composite product) whereby you feature two or more of those items together with a discounted price, can also be a way in which you get your under performing products out the door. Alternatively, you can also add such stock to the more expensive items in-store, so that you get your customers rethinking that $300 price-tag, for when it’s now two-for-one.
Hike Tip: Navigate to your Discounts screen in Hike to create a new composite product bundle for your customers. You can add 2 or more items to the bundle and set a price of your choosing!
Don’t run out of stock!
The idea of not running out of stock in your store when the holiday season approaches might seem obvious, but it could be so obvious that you miss out on it completely, thinking that you’ve already accounted for it!
Indeed, there’s nothing worse for a retailer to see than a queue stretching out to the car park when doors open on Black Friday, only to find that your hot-ticket items are so sparse that you’ve left customers fuming. The implications here could be disastrous, as turning a customer away because of no stock, might mean that you’ve lost that customer for good. And when the retail industry is one largely about repeat business, to call that as an undesirable outcome would be quite the understatement.
However obvious, the fix really is to ensure that you’ve got ample stock of the items you know customers are itching to get their hands on. This also means that you can set pricing in the context of supply and demand. Products in high demand can raise the equilibrium price of the item, so set your prices accordingly.
Hike Tip: Hike POS can set automated par levels to help you manage your inventory! Set customer re-order points on your best-selling products, so that you can stay on top of all your stock.
Set pricing according to time-of-day
Throughout a sales day, the number of customers purchasing an item may see various peaks and troughs, depending on its popularity. This is especially common in cafes and food trucks where a baguette may be popular with customers in the morning, but not so at 3pm in the afternoon.
In those instances, it may be worth considering altering your pricing whereby you set discounted prices on items when they hit their ‘trough’ period. This can be enabled via an intuitive POS system that can highlight the most and least popular time of day that an item was sold.
Following this information, you can set prices for those products during those lean selling hours and gain meaningful contributions to your bottom line.
Hike Tip: To determine the time of day an item was sold, simply head to your Hike Dashboard and use the time tab to see a complete chart of your best (and worst) selling hours.
Research your competitors
Where this might be more of an on the day activity, knowing what your competitors are doing can be a helpful guide on how to set your own prices. This doesn’t necessarily mean that you need to lower or raise your prices to be aligned more closely with your competitors, but it does give you a guideline on where the market is, and what prices customers are paying for.
At the same time, you don’t want to be bogged down by focusing on a single product because that gives you a one-sided view of the what the market is doing. Rather, you need to be focusing your efforts on knowing the prices of many different products all loosely connected within the same product category.
Prices will fluctuate throughout the holiday season, but by not falling too quickly into taking drastic price slashing or increasing measures, can ensure that your store brand is protected and legitimatized in the eyes of your customers. There’s no getting around the enormity of what the holiday season sales presents retailers around the world. It’s hectic, it’s stressful but ultimately it can be rewarding. Setting the right kind of holiday pricing is the perfect way to get started but it takes a fair amount of legwork to ensure that the prices positively reflect your business and customers at large.
It’s imperative then to place trust in a POS solution that can handle your pricing needs and certainly Hike POS is such a system. Embrace setting holiday pricing as a marketing tool, and use it to appeal to customers that love to strike a bargain.