By Megan Moyer, corporate marketing manager, for the “Profits in the front end” blog series
A consumer’s perception of value is very personal. When it comes to front-end products, your customers’ perception of the value offered by your store can widely vary. That’s why your pricing strategy is very important. Once you’ve accounted for costs, fees, and margins, you have to understand how your target market measures value before you can decide on a final retail pricing strategy.
As shoppers, we have different approaches for assessing value based on product types and another set of criteria for services. While I may shop heavily on price for grocery items that I know are the same quality no matter which outlet I purchase them from, price is my most flexible criteria for a HBW item that will clear up an issue that causes discomfort.
When you are deciding on your pricing
strategy you have to consider a number of factors. First understand the financial demographics of the area you are serving. You may have a range of income levels or few. If you have a range, make sure you offer both brand names and private label as much as possible to meet all consumer needs.
Who are your competitors? The number and types of competitors will be critical in deciding your pricing strategy. Your prices have to be competitive, however, you offer a higher level of service than most or all of your competitors, so you can factor that into your more consultative items.
There are other considerations to take into account, such as the convenience of your location, the number and types of products you carry in a given category, your status as a healthcare provider in the community (are there few available?), operations costs, and most importantly, your brand. What do you want to be known for? Whatever your mission is, your pricing strategy should support it.
If you’d like help determining the best pricing strategy for your store, reach out to speak with an HRG pricing analyst, or for a more comprehensive review, learn more about HRG’s 360° Store Assessments.
