How Retailers Can Increase In-Store Sales
How Retailers Can Increase In-Store Sales
Youngstown State University
MGT 6930
September 10, 2014
Is there anyone out there who actually enjoys waiting in checkout lines at the store? Retailers across the nation are always searching for ways to become better and faster than their competitors. The main reason people tend to steer towards online shopping is because it is more convenient for them. Likewise, the main reason people continue to go to brick and mortar stores is to have the item they want in their hand immediately. Retailers can increase in-store sales by maintaining a good pricing strategy, connecting with customers, and keeping the shopping experience convenient. There are a number of factors that affect a retailer’s bottom line and setting the right prices is number one. Pricing strategies for smaller companies will be different from larger chain stores such as Wal-Mart or Target. Once a retailer has decided on their objectives, about.com references a few possible pricing strategies to follow. Cost-Plus Pricing is taking the cost of your materials, plus production costs, plus your fixed costs to get your total cost per unit. From there, you decide what mark-up percentage you want. Another is Target-Return Pricing where you are trying to reach a certain return on your investment, or ROI. Typically the most profitable, if you get it right, is Value-Based Pricing. This pricing is commonly used on products that will save you money in the long run on things such as energy costs (Allen, 2014). An article on buzzle.com (2012) discusses how Wal-Mart keeps their prices so low by purchasing materials in bulk from vendors and by having long-term contracts in place. Wal-Mart also tries to reduce its marketing costs by distributing its advertising costs over a wider output range. “Targeting the mass market with tried and tested products has always been Wal-Mart 's strategy” (Kale, 2012). A few well known effective
Youngstown State University
MGT 6930
September 10, 2014
Is there anyone out there who actually enjoys waiting in checkout lines at the store? Retailers across the nation are always searching for ways to become better and faster than their competitors. The main reason people tend to steer towards online shopping is because it is more convenient for them. Likewise, the main reason people continue to go to brick and mortar stores is to have the item they want in their hand immediately. Retailers can increase in-store sales by maintaining a good pricing strategy, connecting with customers, and keeping the shopping experience convenient. There are a number of factors that affect a retailer’s bottom line and setting the right prices is number one. Pricing strategies for smaller companies will be different from larger chain stores such as Wal-Mart or Target. Once a retailer has decided on their objectives, about.com references a few possible pricing strategies to follow. Cost-Plus Pricing is taking the cost of your materials, plus production costs, plus your fixed costs to get your total cost per unit. From there, you decide what mark-up percentage you want. Another is Target-Return Pricing where you are trying to reach a certain return on your investment, or ROI. Typically the most profitable, if you get it right, is Value-Based Pricing. This pricing is commonly used on products that will save you money in the long run on things such as energy costs (Allen, 2014). An article on buzzle.com (2012) discusses how Wal-Mart keeps their prices so low by purchasing materials in bulk from vendors and by having long-term contracts in place. Wal-Mart also tries to reduce its marketing costs by distributing its advertising costs over a wider output range. “Targeting the mass market with tried and tested products has always been Wal-Mart 's strategy” (Kale, 2012). A few well known effective
References: Online articles Allen, Scott (n.d.) Pricing Methods. About.com. Retrieved from: http://entrepreneurs.about.com/od/salesmarketing/a/pricingstrategy_2.htm Banjo, Shelly (2014, August 18) Human cashiers are returning to Wal-Mart. The Wall Street Journal Digital Network. Retrieved from: http://money.msn.com/top-stocks/post--returning-to-wal-mart-human-cashiers Kale, Sailee (2012, January 16) How Does Walmart Keep Its Prices So Low? Buzzle.com. Retrieved from: http://www.buzzle.com/articles/how-does-walmart-keep-its-prices-so-low.html Morrow, Shepard (2014, July 25) The Importance of Mobile Search in Retail. Socialmediatoday.com. Retrieved from: http://www.socialmediatoday.com/content/importance-mobile-search-retail No Author (2014, July 1) statisticbrain.com Retrieved from: http://www.statisticbrain.com/facebook-statistics/ ExhibitA