I’m not anti-price promotion, but there are broader considerations.
It’s not uncommon for an independent retailer to focus on the price diﬀerential they have with mass, but ignore the rest of the competitive playing ﬁeld.
I’m not anti-price. You need price to do things like drive trial, and to say thank you to a customer. I’m not anti-price at all; I’m anti-trying to compete with mass on price.
In order to not compete with mass by reducing prices, independent retailers need to first understand the playing field. How are their customers judging prices? Is it the price of a comparable product from a competitive label? The price they paid last time? How other products are priced in the store?
Or just the fact that there is a discount promo on the shelf?
Once you figure this out, you can deploy a series of pricing strategies that allow you to be competitive with mass while keeping your pricing where you want and need it to be.
Take stock of your inventory: Try to not carry all the same merchandise as your local mass retailer. This will reduce customer price comparison. Also, look for voids in mass inventory and stock it in your store. Remember, not everyone desires a discount. Consider carrying some upscale brands that mass shies away from because they don’t deep discount.
Amplify your niche: Mass retailers tend to have just a little of everything and this is what makes them dangerous. Independent retailers have the ability to have a focused and lucrative niche that will set them apart. Shout about it. Make sure the community knows what it is that makes you and the brands you carry different, and better.
You already have a competitive edge, now go out and talk about it: Talk about your store’s competitive advantages in advertising and online social media. Things like exclusive products, education, special order capability – all of these things that make you unique will get a customer’s attention versus what mass advertises say. Also, the level of service your staff provides improves your customer’s price perception. By shopping at an independent retailer with knowledgeable staff, the customer has reduced the risk of disappointment in their purchase.
I’m not anti-price promotion. Remember this, the right price is the price the customer is willing to pay. If you offer more than just price promotion this increased value will be understood and valued by the right customers.