Sniffie founder Tomi Gronfors shares his insights from helping more than 600 ecommerce retailers implement pricing automation strategies.
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Dynamic pricing is a strategy where ecommerce brands adjust the prices of their products in real-time based on various factors such as demand, competition, market trends, and customer behaviour.
By implementing dynamic pricing, brands can optimise their pricing to better match what customers are willing to pay at any given moment. For example, during peak shopping periods like holidays or special promotions, brands can increase prices to capitalise on higher demand.
Conversely, during off-peak times, prices can be lowered to attract more buyers and move inventory. This flexibility helps in maximising revenue by ensuring that prices are always aligned with current market conditions, ultimately driving more sales and higher profits.
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Key discussion points
- Talk us through the ICP or market fit of your product – how do you see the different features being relevant to brands vs multi-brand retailers?
- What are the potential risks and benefits of implementing a dynamic pricing strategy for an eCommerce store?
- What types of data are most critical for making informed pricing decisions or implementing profitable pricing for your clients?
- Price elasticity and perceptions of fairness: some retailers I know will honour the lower price if someone complains > what do you advise?
- How does margin-based pricing work in practice for a retailer or brand? How do you implement this on-site typically?
- I know you also monitor competitor pricing and have the ability to then adapt to remain competitive – how does this work in practice?
- What is the relationship between paid media spend and pricing adjustments in response to changing demand and competition? How are your customers approaching this?
- How are your customers implementing personalized pricing strategies based on customer behavior and purchase history – who’s a good example and what impact has it had?
- How are you using AI and machine learning technologies to enhance the effectiveness of an eCommerce pricing strategy?
- How should an eCommerce business approach pricing strategy when expanding into international markets in your opinion?
- What’s your roadmap focus at Sniffie for 2024, what are merchants asking for and why?
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