Price Points by Omnia Retail

It is New Year’s Eve, and you decided to go to a party. Together with your friends, you order an Uber via the Uber app and once you’ve opened it you get a notification: “Demand is off the charts! Fares have temporarily...

It is New Year’s Eve, and you decided to go to a party. Together with your friends, you order an Uber via the Uber app and once you’ve opened it you get a notification: “Demand is off the charts! Fares have temporarily increased to get more Ubers on the road. Your ride will be 2.1 times more expensive than normal.” Ever wondered what this phenomenon is called? This is an example of a surge pricing strategy. In this article, the definition of surge pricing will be explained followed by different occasions where surge pricing happens. Furthermore, both the use-cases, advantages, and disadvantages of surge-pricing will be discussed. At the end of the article, some practical advice will be given on how to implement surge pricing tactics within your pricing tooling.

What is Surge Pricing?

Consumer prices increased by 5.4% last June compared to the year before. Inflation is rising with high speed and challenging times for retailers and brands are present. The uncertain economic environment and rising...

Consumer prices increased by 5.4% last June compared to the year before. Inflation is rising with high speed and challenging times for retailers and brands are present. The uncertain economic environment and rising purchase prices seem to have paired up with some inconvenient occurrences, such as the blocked Suez Canal or the current chip shortages. Whether your company directly faces pricing challenges due to supply shortage, logistical constraints, or limited production, almost all organizations face the same challenge nowadays: how do we protect our margins with cost prices increasing without harming our customer relationships and their price perception? These times request a different pricing approach and adjustments in your pricing strategy. How and when to tackle margin erosions, still drive profitable growth and take strategic control over this new situation requires a thorough understanding and monitoring of the market besides a critical viewpoint on your own internal strengths and weaknesses. To guide you through this period and even transform the challenge into an opportunity for the future, Omnia is here to help. In this article we will discuss and we will guide you through some steps you can take and potential pricing tactics you could apply.

Managing Inflation through your Pricing Strategy

Product life cycle is a well known retail concept that is vital for brands and distributors alike when they go to the market with a new product. For professionals throughout the industry guiding a product through its...

Product life cycle is a well known retail concept that is vital for brands and distributors alike when they go to the market with a new product. For professionals throughout the industry guiding a product through its journey is second-nature, incorporating the concept as part of a pricing strategy, however, is not so widespread. Nevertheless, in pursuit of better turnover and margins, the PLC is an important consideration, giving you the perfect handhold to adjust your pricing strategy. Do you want to be the cheapest for the PS5 (or the accessories for it) in its introduction phase while supply is short? Or do you introduce an innovative product that no consumer knows yet? Do you want to step away from the RRP as a direct-to-consumer brand in the growth stage or do you wait until the product is more mature? These types of decisions should be part of your pricing strategy and can set you apart from your competitors. How should Nokia have priced their indestructible mobile phones, whilst being in a rapid declining phase?

Adjusting your Pricing Strategy to the Product Life Cycle Stage