Published on: January 13, 2023 | Last updated on: August 16, 2024 |
Everyday low pricing is a popular tactic among retailers, especially in North America.
Many big-name businesses, including Walmart and Amazon, have used this pricing model to get where they are today – i.e., taking lots of sales!
And who knows? If it’s worked for them, maybe it’ll work for you, too.
In this article, we look at everyday low pricing and how it can help give your retail pricing strategies a competitive edge.
Everyday low pricing (EDLP) strategies work when companies ensure that their products are priced low over a long period of time.
Often, the original low price point remains even if production costs rise. This means customers are less likely to shop elsewhere because they always get a good deal.
If your business has implemented an everyday low price strategy, avoid running sporadic discounts and/or timed promotions alongside it. You’ll risk harming your brand reputation in a big way!
Across the digital shelf, brands normally employ either everyday low pricing or high-low pricing strategies to help win sales. But what’s the difference between these two approaches?
Put simply:
Ever since ecommerce trading became big business, retailers have debated which strategy has made them more money: EDLP or high-low pricing. Ultimately, though, it’ll be your call in terms of the pricing model that works best for you.
Everyday low pricing has its advantages, which include:
It stands to reason that during sales promotion periods, product demand will be higher. By introducing an everyday low price point, you can keep your inventory levels consistent and lower the risk of being unable to satisfy customer expectations.
Winning at the digital shelf means investing in ecommerce marketing, but ever-changing price points make it difficult to keep shoppers coming back for more. Everyday low pricing allows you to target your advertising efforts around this consistently reduced price point, which will surely appeal to the average cost-conscious consumer.
Introducing an everyday low pricing strategy that’s fixed for a long period of time means staff don’t have to worry about manually marking down items during sales events.
Of course, EDLP has its disadvantages, too, including:
To be a success, everyday low pricing must achieve significant sales volumes. Even if customers don’t buy as many products as you expect, this could seriously impact an already narrow profit margin.
It’s the sensationalism around sales events that helps attract shoppers, especially during seasonal periods. Consequently, an EDLP strategy may fail to garner the attention it deserves by not being loud enough!
Not discounting on products may inadvertently cause customers to distrust your everyday low price point, resulting in poor brand compliance.
Everyday low pricing will definitely appeal to shoppers who are tired of there being so many price variations for similar, if not the same, products. And the less time they spend comparing different prices, the more they have left to engage with your wider brand messaging.
By the same token, retailers might enjoy greater sales, and ultimately profits, from the arrangement, providing they hit certain volume targets. EDLP is an ideal strategy for businesses aiming to position themselves more favourably among their customer base, with cost control being a great way to do just that.
Here at Magpie DBX, we offer a comprehensive price tracker that has eyes on all your products and those of your competitors 24/7. Results are filterable and searchable, plus you can view price trends over time and receive alerts when prices change – not bad if you need to adjust your pricing quickly!
Then there’s our stock availability monitor; this shows which retailers are offering the best terms for your products. It also tracks your competitors’ inventory levels, so you’re never out of the loop when it comes to overall stock management.
Want help maximising your everyday low pricing across the digital shelf? Contact us today to request a demo!
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In this article, we look at the debate around MSRP vs MAP pricing and provide a clearer picture of what these two pricing models can offer.
If you run a business, you will have competitors.
And just like you, your competitors are working hard to make their business the best.
Some things will work for them, and some things won’t. They may have already solved problems that you’re currently facing, or maybe they’re gearing up for a big product launch.
But if you’re not keeping a close eye on them, how would you know all this?
In this article, we break down why it’s important to monitor competitors, including how one of our partners solved a crucial problem by monitoring their competition.
Want to learn more about how Magpie DBX can help your business? Get in touch with us and let us show you!
