Pricing Strategies For Retail

Price benchmark and positioning is one of the most important aspects for a new fashion brand launch. More so if it is an international brand launching in the diverse and competitive Indian market. The key benchmark of course would be the brand's base market price positioning as a starting point. More importantly to consider its global competition brand’s existing price positioning in India. And try to marry both outside-in and inside-out perspectives to identify that sweet spot in the market. Just applying a multiple on to the brand’s base market pricing for India may not suffice to cut through. It’s more nuanced than that, below are some key factors to consider: 🔸Brand's own market price positioning and aligning India pricing with that. M&S had to revise and reduce its pricing within a few years of its launch in India back in 2001, to align more with the market and be competitive. 🔸Brand’s global competitors pricing in India and their positioning vis-à-vis brand’s global benchmark. For example, a European denim brand starting 100 euros mrp planning to launch in India, would need to see its price benchmark with Levi's both in Europe as well as in India market to compare and align accordingly. 🔸Net landed cost including custom duty, freight etc and India sourcing mix requirements to reach ideal gross margins while maintaining global product standards & price competitiveness in the local market. Many leading international fashion brands operating over many years in India have successfully been able to offer that with scale and continue to grow. 🔸Pricing basis product perceived value, core vs fashion, categories etc and may price at a premium as/if needed, or sharper to try and sell more on fullprice and less on discounts. Zara entry price products in India are priced much sharper vis-a-vis higher price products in comparison with global price benchmarks, just to cater to that sweet price point for its TG. Thanks to social media, today customers are well informed about brand price positioning in the global market and would compare its pricing in Dubai, Bangkok etc or even the EU and US markets with the one in India, and make their shopping choices accordingly across brands and markets as accessible. Sharing snapshots of SS25 season men's t-shirt basic entry price point comparison for like-for-like style across brands in India and its global base market for perspective. Your thoughts? #Pricing #Positioning #Benchmark #Fashion #International #Brand #India #Market #Launch #Strategy

This peak season, protect your margins by controlling discount stacking. As we approach peak trade and the peak discounting period, brands often default to the bluntest tool in the box: heavy sitewide sales. The logic is simple “drop the price, drive volume, clear stock.” But too many brands forget one crucial detail: stacking discounts can quickly turn profitable orders into loss-making ones. The Overlooked Discounts: Sitewide promotions don’t operate in isolation. Sitting in the background are your: High-intent pop-ups Welcome series discounts Cart abandonment flow incentives These are designed to capture incremental conversions in normal trading periods. But when layered on top of aggressive sitewide offers, they often wipe out already-thin margins. A Quick Example: RRP: $100 Sitewide discount: 30% → Sale price = $70 Product cost (COGS): $20 Customer acquisition cost (CAC): $30 Shipping / merchant / pick & pack costs: $15 At this stage: Revenue: $70 Costs: $20 + $30 + $15 = $65 Profit: $5 per order (5% margin) Not great, but still positive. Now add in an additional 20% discount from a pop-up or triggered flow: Extra discount: 20% off $70 = -$14 Adjusted sale price = $56 Recalculate: Revenue: $56 Costs: $65 🛑 Net loss: -$9 per order Why It Matters At scale, these “hidden discounts” mean businesses spend thousands acquiring customers and fulfilling orders at a negative contribution margin. Instead of driving growth, they quietly erode cashflow and profitability during the most critical sales period of the year. How to Avoid This Trap: Audit your flows before peak trade. Adjust high-intent pop-ups, welcome offers, and cart abandonment discounts during sitewide promotions. Set a CAC ceiling. Ensure that even with discounts applied, your contribution margin remains positive. Model scenarios. Calculate “worst case” blended discounts and costs before launching campaigns. Use AI or rules-based systems. Automate safeguards so discounts can’t stack beyond a certain threshold. Discounting can be a powerful lever, but unmanaged, it becomes a profit killer. You may risk turning your busiest period into your least profitable one.

Discounts aren’t killing your profit margins. They’re killing your brand. Bold? Maybe! But after working with high level e-commerce clients, I’ve seen this pattern repeat far too often. Here’s why discounting is a trap and what you should do instead: One client of mine was stuck in a "discount or die" cycle Offering 20-30% off constantly. Their sales were decent, but: - Profit margins? Shrinking. - Customers? Loyal only to the discounts, not the brand. So, what did we do? We threw the discounts out the window and Implemented this no-discount blueprint: 1️⃣ Stack the Value →Instead of cutting prices, we built bundles with exclusive perks: Premium products + personalized add-ons. ↳ Result: 45% higher average order value – no discounts needed. 2️⃣ Scarcity That Matters → We launched limited-edition products Based on actual customer demand. No fake urgency, just genuine exclusivity. ↳ Impact: A 167% increase in full-price purchases. 3️⃣ Reward Loyalty, Not Bargain Hunters → We created a loyalty program focused on engagement: Early access, exclusive content, priority service. ↳ Result: 78% higher customer lifetime value. 4️⃣ Premium is a Mindset → Redesigned their brand story to scream exclusivity: - Behind-the-scenes storytelling - Expert-led masterclasses - Premium unboxing experiences ↳ Outcome in 6 months: ✅ Profit margins: +34% ✅ Customer retention: +56% ✅ Brand perception: +89% Discounts train customers to wait for sales. Value trains them to stay for the brand. P.S. - Want to escape the discount spiral? Let’s build a strategy that scales your profits and positions your brand as the premium choice. Drop a “Yes” in my DMs if you’re ready to level up. (And no, this doesn’t include a 20% off strategy.) But you can Follow me to learn more things about SEO. #EcommerceStrategy #MarketingStrategy #BrandPerception

Cannabis retailers are stuck in a promotion death spiral. Ironically, it’s the success that's killing them. Retailers are cannibalizing the very industry they operate in, and what comes next: 1. It's an Era For a while basic promotions work. But as competition increases, more is more. Buy 10 for $100 is the temperature check. 2. More activity is not the answer Because of the increase in promotions, standing out with compelling offers is more difficult. Conversion rates, open rates, and impact results are “down”, leading to a bigger and more promotions. 3. Revenue Misalignment: Companies that profit from the promotional activity will see decreased valuations as the industry eats itself up... unless they decide to reinvent and find new strategies that ensure increases in net profit in addition to top line. 4. AI Will Make It Worse: Automated promotions- not intuned with what customers really want will decrease promotional conversion rates, accelerating the death cycle. So what’s the answer? Should we all stop doing promotions? Far from it. We need to switch our approach and mindset. 2 years ago, just having promotions was good enough. Then we used bulk promos to differentiate and add top-line revenue. Bulk promos eventually become less impactful. In 2024, the key to promotions will be Signals, Triggers, Relevance and Context. For example: If you're starting a new campaign, don't define your audience as: “Ounce customers in Grand Rapids, Michigan” Instead, look for: “Ounce customers from Grand Rapids Michigan, who have spent $300 this year as part of our loyalty program and purchased flower or concentrates with us in the last 20 days." Retailers that have a Signals-first approach will win in the future. If cannabis retail companies are going to survive, they will have to reinvent themselves to ensure a decrease in dumb promotions and demonstrate an increase in contextual signal-based efforts. Wednesday and Friday this week are regional temperature checks.

Your pricing page is the second most viewed page on your website. Yet, most pages fail to convince users to buy. I’ve spent 100s of hours running price experiments… Here are the 5 principles to make your pricing page so irresistible that it sells itself: — 𝗢𝗡𝗘 - 𝗖𝗼𝗻𝘃𝗲𝘆 𝗬𝗼𝘂𝗿 𝗠𝗼𝗱𝗲𝗹 Ask yourself: → What’s the pricing structure? → Who’s the right audience for each plan? → Why should someone choose this plan? If your users can’t answer these questions immediately, you’re losing them. → Talk to your users. Find out what’s confusing. Fix it. → Make your plans make sense because a confused mind never buys. — 𝗧𝗪𝗢 - 𝗪𝗵𝗮𝘁 𝗪𝗼𝗿𝗸𝘀 𝗙𝗼𝗿 𝗢𝘁𝗵𝗲𝗿𝘀 𝗠𝗮𝘆 𝗡𝗼𝘁 𝗪𝗼𝗿𝗸 𝗙𝗼𝗿 𝗬𝗼𝘂 Copying your competitor’s pricing page might seem tempting. But it’s a shortcut to failure. Here’s what you should do: → Dig into your user research. Prioritize experiments that solve your audience’s specific pain points. → Skip the “growth hacks” that pile up downstream problems for sales or support. Your users are unique. Treat them that way, and your results will be too. — 𝗧𝗛𝗥𝗘𝗘 - 𝗟𝗲𝘃𝗲𝗿𝗮𝗴𝗲 𝗧𝗵𝗲 𝗣𝗿𝗶𝗻𝗰𝗶𝗽𝗹𝗲𝘀 𝗼𝗳 𝗕𝗲𝗵𝗮𝘃𝗶𝗼𝗿𝗮𝗹 𝗣𝘀𝘆𝗰𝗵𝗼𝗹𝗼𝗴𝘆 Your pricing page isn’t about what you’re selling. It’s about how you’re selling it. Use psychology to guide decision-making: → Offer three plans: good, better, best. → Highlight the one you want them to choose. → Include a free option; it’s a no-brainer for undecided users. → Use the decoy effect: make your premium option shine by comparison. These aren’t just tricks. They’re time-tested ways to make decisions easier for your users. — 𝗙𝗢𝗨𝗥 - 𝗦𝗶𝗺𝗽𝗹𝗶𝗳𝘆 𝗙𝗼𝗿 𝗨𝗻𝗱𝗲𝗿𝘀𝘁𝗮𝗻𝗱𝗶𝗻𝗴 𝗔𝗻𝗱 𝗔𝗱𝗱 𝗠𝗼𝗿𝗲 𝗜𝗻𝗳𝗼𝗿𝗺𝗮𝘁𝗶𝗼𝗻 𝗘𝗹𝘀𝗲𝘄𝗵𝗲𝗿𝗲 Your pricing page doesn’t need to say everything. And don’t make users “work” to understand your pricing. → Start clean: clear plans, clear benefits, and add depth where it counts. → Use FAQs and deeper sections for additional details further down. → Think Apple: clean, focused, and easy to understand, with details available when needed. — 𝗙𝗜𝗩𝗘 - 𝗢𝗽𝘁𝗶𝗺𝗶𝘇𝗲 𝗙𝗼𝗿 𝗨𝘀𝗲𝗿 𝗦𝘁𝗮𝘁𝗲 Your users are in different stages of their journey. So your pricing pages should tailor to their experience with your pricing page. Here’s what to do: → New visitors? Show them why you’re the best choice. → Returning users? Highlight what’s new or offer a discount. → Existing customers? Nudge them toward upgrades tailored to their usage. Also, a little personalization will go a long way: → Use their language, their currency, their context, etc. — Want to dive deeper with 6 best pricing page breakdowns and top experiments of my career? Go here: https://lnkd.in/dvBxfY_q

The way promotions are framed matters. It shapes how consumers perceive the discount, and how they structure their baskets. There’s a great paper that explores this in detail: “Mix or Match? Consumer Spending Decisions in Conditional Promotions.” The authors ran three different experiments comparing two promo scenarios: 🅰️ Buy 2, Save 20% on Both Items 🅱️ Buy 2, Save 40% on Cheaper Item On the surface, these look quite similar. If the user has the same cart, the discount will be the exact same in either scenario. But the way the discount is framed meaningfully shapes how the shopper decides what items to buy. In both cases, the user chooses their first item mostly based on how much they like the item. Then, they choose a second item largely based on maximizing their promotional savings. But the 2nd option (Buy 2, Save 40% on Cheaper Item) leads to higher revenue, as users seek out a second item that’s closer in price to the first item. Here’s roughly how they differ: Buy 2, Save 20% on Both Items →  Drives users to seek out a cheap 2nd item to qualify for discount →  More useful for even optimization of inventory and moving low-price items Buy 2, Save 40% on Cheaper Item →  More focus on savings (vs liking the items) →  Drives higher spend on 2nd item to maximize savings Surprisingly, the researchers observed that the more complicated “Save 40% on Cheaper Item” promotion had the same participation rate as the simpler offer. I generally prefer the 2nd approach. It protects brand equity by only discounting one item (while driving a higher spend on that item). There’s no one-size-fits-all rule for running better promotions, but it’s another good example of how more targeted, granular discounting drives better outcomes while protecting the brand.

I priced our first mattress at ₹29,900 and not ₹30,000 for a reason. Psychological thresholds work the same way at every price point. When we launched The Sleep Company at ₹29,900, I made one deliberate decision. Not ₹30,000, or ₹29,999. Exactly ₹29,900. It was not about the nine hundred rupees. It was about which side of a threshold the product sat on in a consumer's mind. One of The Wall Street Journal's report captured something every founder should understand. Companies like Hasbro and Walmart are going to extraordinary lengths to protect a single number: $9.99. Hasbro redesigned packaging and removed boxes from board games. Walmart ran summer promotions on Coke and Pepsi specifically to bring them just under $10. None of this is about saving the consumer money. It is about which category the product sits in. As a Columbia Business School professor put it: consumers do not process prices mathematically. They process them categorically. This is true at every price point: → ₹99 feels different from ₹100 → ₹499 feels different from ₹500 → ₹29,900 feels different from ₹30,000 What I learned building TSC is that pricing is not just about recovering costs or protecting margins. It is about understanding the invisible lines consumers draw in their heads and designing your product, packaging, and cost structure to land on the right side of them. The best pricing decisions are not made on spreadsheets. They are made by understanding how your customer actually feels when they see the number. That feeling determines everything. Do you think most founders spend enough time thinking about pricing psychology versus pricing economics?

Pricing and packaging is, IMO, the most underutilized, highest leverage tactic available to founders to make an impact on sales. At Gigya, we started with $10K ACVs and 5 years later were at $250K ACVs, largely due to improvements in pricing and packaging. Unfortunately, there is not much out there on the right way to approach pricing / packaging. Further, AI-based software, especially AI agents & teammates, are disrupting the old models. Specifically, the usual 'per seat' SaaS pricing model is no longer quite relevant when the software is doing alot of the work humans used to do. To help, I've outlined 5 core pricing & packaging pillars for (AI) startups: 1. Platform Pricing (flat or tiered) 2. Seat-Based Pricing (familiar, but can punish success if AI replaces seats) 3. Consumption-Based (pay-as-you-go, works well with AI compute) 4. Add on Pricing (A la carte features, with big upsell potential) 5. Outcome-Based (ultimate alignment, but hard to measure + forecast) Key takeaway: Think about how your product delivers ROI - then tie your model to that. It's probably going to be using a combination of these pricing strategies. Keep in mind what approaches are most likely to maximize value capture upfront (average contract value) and over time (net dollar retention). As a rule of thumb, aim for net dollar retention in the 120-140% to be best in class. Would love to hear your take - what's working (or not) in pricing, especially in this new AI software world?

Why do prospects choose your company despite competitors offering steep discounts of up to 70%? In every competitive deal, there comes a moment of truth. Your prospect tells their current vendor they're considering a switch. Suddenly, the desperate discounting begins. 50%, 60%, sometimes 70% off. Most sales reps lose at this moment. But elite sales pros win anyway. How? Through what I call the 10X Pain Method. It's a systematic approach to quantifying pain at 10 TIMES the cost of your solution. Here's the framework: 1️⃣ Identify the fundamental pain points in discovery 2️⃣ Make prospects RELIVE painful experiences through detailed questioning 3️⃣ Expand from direct costs to include indirect and opportunity costs 4️⃣ Attach concrete numbers to emotional situations 5️⃣ Set landmines against competitive discount tactics For example, if your solution costs $80K, you need to uncover at least $800K worth of pain. For instance, let’s say I sell a global HR platform. Here's the exact language I use: "Tell me EXACTLY what happened the last time this occurred?" "What did your employees say when they didn't get paid correctly?" "What were the downstream effects of that?” "If this happened again…what would happen?" Then the crucial step… quantifying: "You said 4 employees were so fed up after the 4th time it happened they started grumbling about quitting. If this causes you to lose just four GOOD employees, at a replacement cost of $200K each? that's $800K in direct costs alone to replace good talent.” Next, I set landmines. "When you tell your current vendor you're considering us, they'll likely slash their price by 70%. But will that solve the fundamental problems you’re currently dealing with?" The prospect now has a framework to evaluate the situation beyond just price. This method works because it addresses the real reason prospects don't switch (what behavioral economists call "omission bias") it feels safer to stick with a known bad situation than risk making a change. By properly quantifying pain, you shift the equation. — Want to grow your sales so fast it feels illegal? Don’t miss this: https://lnkd.in/gYaBjpf2

Inflation often forces businesses into a dilemma—raise prices and risk losing customers, or keep prices stable and shrink margins. But what if data could help strike the perfect balance? 🚀 Challenge: Flipkart, one of India’s largest e-commerce platforms, noticed fluctuating customer retention rates and declining repeat purchases, especially during inflationary periods. Traditional deep-discount campaigns led to short-term sales spikes but failed to build long-term customer loyalty. 🔎 Solution: Data-Driven Discounting Strategy Flipkart’s analytics team uncovered a key insight: Small, frequent discounts (e.g., 5-10% on repeat purchases) led to higher engagement. Personalized offers based on purchase history encouraged repeat buys. A/B testing revealed that customers preferred consistency over occasional deep discounts. 💡 Implementation: Using AI-driven dynamic pricing, Flipkart rolled out: ✅ Tiered discounts for loyal customers. ✅ AI-powered coupon recommendations. ✅ Targeted email campaigns promoting small, time-sensitive discounts. 📈 Results: After three months of testing, Flipkart saw: ✔️ 17% increase in repeat purchases ✔️ 12% uplift in customer retention ✔️ Higher profit margins vs. deep discounting 🎯 Key Takeaway: In an inflationary environment, data-driven pricing isn't just about maximizing revenue—it’s about customer psychology. Businesses that personalize their offers and optimize discounts intelligently can boost retention while protecting margins. 𝑾𝒉𝒂𝒕 𝒑𝒓𝒊𝒄𝒊𝒏𝒈 𝒔𝒕𝒓𝒂𝒕𝒆𝒈𝒊𝒆𝒔 𝒉𝒂𝒗𝒆 𝒘𝒐𝒓𝒌𝒆𝒅 𝒇𝒐𝒓 𝒚𝒐𝒖𝒓 𝒃𝒖𝒔𝒊𝒏𝒆𝒔𝒔 𝒊𝒏 𝒄𝒉𝒂𝒍𝒍𝒆𝒏𝒈𝒊𝒏𝒈 𝒕𝒊𝒎𝒆𝒔? #datadrivendecisionmaking #DataAnalytics #DiscountStrategy #BusinessStrategies