Setting a price on a product or service is challenging. The task gets more complicated when you have to choose between your online store and physical store. Do you want to keep the same prices on both of those spaces, or do you want to have higher prices on your physical store than on your online store?     

In 2017, The Wall Street Journal reported that Walmart had higher online prices than in physical stores. Walmart applied that strategy to increase its online revenue. The reason behind this was that some items were unprofitable to ship. MIT Sloan Management Review fall edition 2018 proved that retailers that had priced differently across different channels had “2%-5% growth.”  

MIT concluded that buyers were comfortable with high in-store prices because they saw value in immediacy, physical proximity, and exclusive availability. That was for low-priced items (for this study MIT used toothbrushes priced a $3). For high-priced items, everything changed. People chose the online product because it had the lowest price.    

So, yes, it makes sense for retailers to have different prices on their online and physical stores. These are ways you can win the market by having different prices on your various sale channels.    

1- Implement different pricing strategies 

First, think about the pricing strategies that you are going to use. To implement pricing strategies, you need to have some basic information. The willingness of the consumers to accept price differences by channel, the prices of your competitors, and the demand of the product are three vital points.  

After you have done this and applied your pricing strategy, you have to monitor it and optimize the prices of your products.   

2- Same level of information and communication 

All your employees must have information about the prices online and in physical stores. We have experienced that when a customer asks why a product has a different price in the store versus online, store employees do not have a clear answer. They often say, “they should be the same price” or “they don’t tell us why.”   

Every staff member of your company must be able to answer the question about the price difference and must be able to explain the reasoning behind it. That is why you need to prepare them to give the customer an answer.   

PriceTweakers offers your company the best insights about the market and your competitors. With that information, our pricing software allows you to create many pricing strategies that will permit you to increase your margins and sales. The best thing about this? It is fully automated. We also have two additional modules, dynamic pricing, and MAP monitoring. Are you interested? Contact us for more information.      

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