Far too little attention is often paid to pricing in online shops and e-commerce. Especially at the beginning, prices in shops are sometimes set rather arbitrarily. Many shop operators are initially concerned with attracting as many customers as possible to the shop. However, they often fail to realise that it can be difficult to simply leave a price level once it has been set. Price increases in particular are met with mistrust and scepticism by most shoppers for psychological reasons alone. It is therefore important to approach the issue of prices strategically from the outset. They form an important part of the overall business strategy in an online shop and must be carefully considered. It should also be clarified from the outset how the management of prices will be technically guaranteed on an ongoing basis. Shopware 6 already offers some important functions in its basic scope, which can also be supplemented by customised developments. We will come back to this in the last part of this article.
Why is it so important to have your own pricing strategy in e-commerce?
Developing your own pricing strategy for your online shop is no small or easy task. Nevertheless, as a shop operator you should not avoid it. Your prices have a significant impact on your business success:
1. they are an important tool for making and keeping your e-commerce competitive overall.
2. they are the most important element that contributes to maximising your profit
3. they make it clear what overall business strategy you are pursuing with your online shop.
4. for customers, prices are a key factor in the final purchase decision.
5. Prices are also suitable for providing special incentives to buy from time to time.
Pricing and pricing strategy are at the heart of your e-commerce sales strategy. Since prices are so important, you should be better prepared when setting prices.
Which aspects are decisive for your pricing strategy
There is no one pricing strategy. Ideally, the pricing strategy should fit your e-commerce like a perfectly fitting item of clothing. That's why it's not very effective to orientate yourself solely on the strategy of large shops. Shop giants such as Amazon can set their own price levels due to their market position and increased competitiveness. Nevertheless, it is useful to take a closer look at the pricing strategies of other shops. This analysis will quickly make you realise what is important when developing your own prices:
Prices never stand alone
Every pricing strategy has an impact on e-commerce as a whole at one point or another. For example, if you decide in favour of a high price level because you offer high-quality products or services, this can affect the speed at which you can penetrate the market. Higher prices generally slow down this process. If, on the other hand, you opt for a lower price level and lower-quality offers, you can penetrate the market more quickly. However, it is important for your overall sales expectations that you sell as many products and services as possible. When prices are low, the masses do it.
Prices raise certain expectations
If you have decided on a certain price level and maintain it consistently over a long period of time, you will hardly be able to sell deviations from this level to the customer, especially upwards. A consistently low price level can quickly cause you problems if it jeopardises your profitability. If you then raise your prices to safeguard your profitability, your customers will not want to understand this step and could go to your competitor. In this situation, you suffer a double loss. You have calculated at the profitability limit, which is now jeopardised, and you also lose valuable customers. The price level has an overall effect on customer expectations. With higher prices, customers will automatically expect a high level of quality. If you consistently set your prices at the upper limit, the expectations of your e-commerce are very high in this respect. This also means that customers who are generally willing to pay higher prices can quickly be disappointed.
Your margin is an important factor for your pricing strategy
You cannot develop a valid pricing strategy without knowing your margin. In business terms, this is the ratio of revenue to costs. You want to cover your costs and you also want to make a profit. What sounds so simple now can be quite tricky in detail. In this context, think about factors as inconspicuous at first glance as shipping costs. Many customers today want free delivery. You probably cannot offer this service in comparison with a very large shop. In many cases, however, buyers are prepared to accept a minimum purchase value in order to achieve free delivery. If you think in different directions here, you would proceed as follows: You would modify your delivery costs once again and, on the other hand, set a minimum purchase value. You would then achieve two important advantages for your shop: you could succeed in reducing the delivery costs and you would sell more goods because most customers want to reach the minimum purchase value for free delivery.
USP and purchase incentives
USPs not only play a role in your overall e-commerce and the development of your business strategy. You can also set convincing accents in pricing. USPs have the function of convincing customers of your offer and persuading them to buy. On the one hand, this is about the products or services themselves, and on the other about various additional services that can make your offer particularly attractive. When it comes to prices, factors such as a new customer discount, a welcome bonus, the option of free returns with a possible extended return period of 100 or 180 days, a premium or bonus system for regular customers come into play. The permanent measures under the USP are supplemented by short-term promotions and purchase incentives. These include, for example, special offers, seasonal offers, offers for special customer groups with which you can create short-term incentives to buy, for example to bridge periods of low sales.
The importance of market and customer groups for your pricing strategy
Even if you cannot base your pricing 1:1 on major competitors, your pricing cannot be detached from the competition. You need to look at what is currently happening on the market in your sector and for your e-commerce and what trends and tendencies you are observing. Market observation should be carried out professionally on the basis of automated systems so that you can really keep an eye on everything. You will have to react to some changes in your prices. The customer group that makes up your e-commerce target group is also of decisive importance when setting prices. A typical buyer of high-quality electronic products, for example, will react differently to higher shipping costs with insurance than a customer who wants to purchase average-priced household items of medium quality.
How Shopware 6 can support your pricing strategy
We have seen so far that developing and consistently maintaining a pricing strategy is a big task. In this context, take a look at the core functions and enhancements of Shopware 6. Discounts and promotions, for example, can be entered in the administration area. Plugins such as Pricemonitor can facilitate price optimisation for the shop, taking various marketplaces into account. Last but not least, their presentation in the shop also plays a role in the pricing strategy. For example, USPs should be presented to the customer in an appealing way. This addresses the major topic of "Theme" in Shopware 6. There are many individual options here, including at the development level, to optimise pricing and the management of prices at a technical level in the shop. Get in touch with us.
