Returning to Retail Strategy
Knowing if you are establishing the right pricing and promotional image within your marketplace is only possible if you go back to your retail strategy. Your retail strategy has already helped you define the message you want to convey to your customers. Now is when you must verify that your pricing and promotional strategy supports and strengthens your retail strategy.
When we first considered retail strategy in Chapter 2 as the foundation for everything that followed, we laid out some of the benefits your e-retail site may offer consumers to compel them to shop at your site, including the following:
Broad selection (wide range of categories, features, price points, and so on)
Deep selection (lots of colors and sizes of each item)
Special/niche selection (e.g., special sizes, special-interest items)
Customer service and support
Rare or unique items
Leverage from partners
Brand recognition and loyalty
Value of site content to users
In the chapters that followed, we walked through the decisions necessary to flesh out that strategy. By this point, your e-retail concept has an easily recognized character, as every store, virtual or otherwise, has character. The character you build sets up the customer's expectations on pricing. No one expects Tiffany's to drop its prices just because Crazy Jim's Diamond Emporium is having a sale. In fact, Tiffany's would probably lose customers if the fine jeweler appeared to be competing with Crazy Jim.
When we begin to work on pricing and profitability, it is easy to lose sight of the overall character of the enterprise we are trying to build. When dealing with financials, it is common to think solely in terms of financials. However, you must keep tabs on the implied messages sent with the choices you make and how you present them to your customers. These are particularly important when you are starting out and creating the critical first impressions on your customer base.