Price Consistency VS Discounts - Which to choose?
" We believe that a stable pricing strategy (whether EDLP or luxury) serves better in building customer loyalty, rather than occasional discounts. Consistency in prices yearlong helps build customer confidence in a retailer’s products, which strengthens its position in the market. On the flip side, inconsistency in prices causes friction between retailers and buyers, negatively impacting their loyalty towards a particular company....
It is safe to say that EDLP is not a relevant strategy for apparel retailers given the nature of their business. The market is highly saturated and competitive, and ultimately pricing becomes the main differentiating factor between comparable companies. Apart from offering discounts, retailers try to push full-priced sales of better fashion inventory where ever possible. The only way they can maintain consistency in prices is by targeting a whole other market segment with luxury products and premium prices..."
Read the full article at Forbes.
includes complete analysis of Wal-Mart & Costco (General Merchandise); Abercrombie & Fitch (Apparel) & Luxury Brands
Image Credit: US News