E-Commerce Brands & Retailers Building Trust with Transparent Pricing

Is there such a thing as too much honesty? In business, and in pricing, opinions differ. The concept of transparent pricing refers to having pricing information readily available and accessible to customers, benefiting both sides:

• Buyers can make informed decisions, compare prices and avoid overpaying
• Businesses can improve trust and loyalty from consumers, win more business and avoid angry reviews

However, transparent pricing can also have downsides. What if you’re too honest about how you set prices, and customers decide you’re overcharging them? What if competitors use the information to undercut you?

In this article, we’ll explore the evolving role of pricing in the overall marketing strategy and how price transparency specifically is used as a messaging signal to build trust in an increasingly sceptical marketplace.

The Role of Pricing in the Marketing Mix

The original iterations of the Marketing Mix consisted of four P’s: Product, Place, Promotion and Price. Eventually, this expanded to the 7 P’s and added Physical Evidence, People and Process.

While each of these areas is important to build a well-rounded marketing strategy, we want to focus today on the role of pricing and how it can be used as a marketing strategy in and of itself. 

The Most Important P in the Marketing Mix lays out two main ways in which pricing strategy influences marketing performance: 

1. It determines the volume of the marketing budget
2. It influences how effective marketing strategies can be

Both of these are certainly true. The price of a product and its margin determine how much revenue the company will bring in and how much funding will be allocated to marketing. The price also impacts how customers view a product in comparison to others in the same category, and the price elasticity of that product should be considered when setting a strategy.

However, we would argue that we can build upon the second point to see a third way a pricing strategy can impact marketing: as a messaging signal. What if a brand or retailer chooses to be transparent with customers about its own pricing strategy? Regardless of the specific price levels and strategy chosen, what does the act of transparency signal to customers?

The question of whether transparent pricing is the right strategy for e-commerce businesses is not black and white, but it is an interesting option to consider as consumer expectations continue to evolve in today's digital-first marketplace.

What Is Price Transparency in E-Commerce?

First, let’s go over how price transparency actually plays out for e-commerce brands and retailers. Transparent pricing can be utilised in a variety of ways: 

• Telling customers about all the factors that determine the final price they pay. This can include the cost of manufacturing, distribution, labour and other costs, as well as things like shipping, import duties and VAT.
• Showing price history. Historical price transparency typically involves showing customers how the price has changed over time, whether through one-time discounts and offers or increases and decreases of the RRP (Recommended Retail Price).
• Comparing prices across the market. Some brands and retailers show a live view of the price across other channels, so customers can make an informed decision about where to buy.
• Avoiding surprise costs. Companies ensure there aren’t any hidden costs that appear at checkout. The customer is aware throughout the process of the price they will pay.
• Explaining price changes. If the brand or retailer decides to increase or decrease the price on a product, or across their entire product line, they might explain the reason and data behind this price change. This may serve inadvertently as a marketing tactic, as shoppers may think highly of a brand that is open about their price changes, which could increase loyalty and sales.
• Following price regulations. In May 2022, the EU implemented a new directive aimed at bolstering consumer protection and their overall knowledge of a product’s pricing. The Price Indication Directive (PID) (part of the updated Omnibus Directive) stipulates that when a trader intends to implement a price reduction on an item, they must also show the item’s previous price. The original price, prior to the reduction, is presented as the most recent and lowest price at least 30 days prior to the newly introduced reduction. 

Omnia Retail offers the only Dynamic Pricing tool with the ability to use and display the lowest price over the past 30 days, enabling e-commerce sellers to stay in line with the Omnibus Directive.

Stay Omnibus Compliant with Omnia's Pricing Software

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Transparent Pricing Example: KoRo Drogerie

One well-known example of transparent pricing is KoRo Drogerie, a Germany-based online shop selling a variety of long-life, natural and processed foods, plus kitchen utensils and cooking accessories. One of KoRo’s five basic principles is Fair Prices:

The KoRo concept can and will only work if we pass on our cost savings resulting from the above principles directly to you. Quality must be affordable.

Especially in this day and age, we are aware that it is easy to compare similar products from different suppliers. That is why it is KoRo's goal to be able to offer a fair price-performance ratio for all our products. Every consumer must be able to rely on KoRo to take care of the price comparison process so that customers can be sure that they have chosen the best shopping option. 

KoRo Drogerie has had multiple versions of price transparency over the years. In the past, the company actually displayed price development history directly on the website, but this has since stopped – perhaps an example of too much transparency or not enough pay-off to make the labour worth it.

Now, KoRo is using price transparency as part of its marketing strategy. The company announces via blogs when prices change for their product lines, whether prices are increasing or decreasing. For example, KoRo has published blog posts explaining when they've reduced prices due to favourable market conditions and improved purchasing power. Two years later, in February 2023, they transparently announced prices would increase by an average of 8.5% as a result of high food inflation in Germany.

KoRo's price increase communication (translated illustration)

What’s notable about KoRo’s approach in 2025 is its expanded commitment to price justification. They now provide detailed monthly reports on supply chain factors affecting their pricing, creating unprecedented visibility into their decision-making process. 

This transparency is an effective messaging strategy, showing customers that the company can be trusted to communicate honestly and price fairly. This is consistent with the general perception of KoRo, which is famous in the German market for its fair and sustainable approach. The company receives a 4.78 rating on consumer trust website TrustedShops.de, an impressive accomplishment in an era where consumers are increasingly sceptical of e-commerce pricing practices.

Transparent Pricing Example: Everlane

US-based fashion retailer Everlane illustrates another version of price transparency. At the bottom of every product page, the company breaks down the true cost of the production process. The Madison Dress, for example, has the following cost breakdown:

Past iterations of Everlane’s Transparent Pricing infographics actually included the “True Cost”, as well as Everlane’s final price and the traditional retail price. The brand typically uses a markup of 2-3x, whereas traditional retail is closer to 5-6x. It appears that this part of the infographic is no longer included on product pages, indicating that perhaps the brand decided it was too much transparency.

Everlane's transparency approach extends beyond simply showing cost breakdowns. By consistently demonstrating the relationship between production costs and final pricing, the brand reinforces its positioning around ethical manufacturing and fair value. This transparency has helped Everlane build a loyal customer base that understands and accepts the premium associated with its sustainable production methods.

Pricing transparency is so influential that 94% of customers say they would be more loyal to brands that practice transparency. Brands that communicate both price increases and decreases see a higher customer lifetime value compared to those that only explain increases. Everlane’s approach exemplifies this bidirectional transparency that modern consumers increasingly expect.

The Changing Landscape of Price Transparency

Today's consumers have access to unprecedented information through price comparison tools, browser extensions, and AI shopping assistants that can analyse pricing patterns across the web in seconds. This technological shift means that pricing information is increasingly accessible, whether brands choose to share it or not.

What does this mean for retailers? The choice is no longer simply whether to be transparent, but how to proactively communicate pricing decisions. Brands that provide context for their pricing maintain control of their messaging, while those that remain opaque risk having their pricing practices scrutinised without the benefit of explanation.

This has led to what industry analysts call "strategic transparency"—the careful consideration of what pricing information to share, when to share it, and how to frame it to build customer trust. Companies must balance the desire for transparency with the practical realities of competitive positioning and business sustainability.

Consumer trust in the age of AI pricing

The rapid adoption of AI-driven dynamic pricing systems presents both opportunities and challenges for transparency. Recent surveys indicate that 64% of consumers express concern about “black box” pricing algorithms that adjust prices in ways that aren’t visible or understandable.

This anxiety has led to a new form of transparency: algorithm explanation. Leading retailers are now not only showing their prices but explaining the general parameters that influence them. For example, one major electronics retailer now includes a “Why This Price?” feature that explains factors like seasonality, inventory levels, and competitive positioning that influenced the current price.

While this doesn’t reveal the exact formula, it provides enough context to satisfy most consumers’ desire for fairness and understanding. According to MIT’s recent study on algorithmic pricing acceptance, even basic explanations for price changes increase customer satisfaction by up to 42% compared to unexplained fluctuations.

For e-commerce businesses leveraging dynamic pricing software, finding the balance between algorithmic sophistication and transparent explanation represents one of the most significant challenges and opportunities of the current retail landscape.

Putting Pricing Transparency Into Practice

Any e-commerce business that wishes to utilise transparent pricing needs to have a solid data foundation from which to build its pricing strategy. Those insights can then enable marketers to make smart marketing choices and build the right messaging around pricing transparency, so the business can use it to increase consumer trust.

Whether you should use pricing transparency for your business, and which type to choose, depends on your specific situation. It’s a fine balance: You want to increase customer trust, but you also need to earn a profit. And with consumer protection laws requiring certain levels of transparency, like the PID (Price Indication Directive) and others, it isn’t only a commercial question, but a legal one, too. Transparent pricing has to be managed properly, with the right messaging and data, in order to be effective.

The implementation process typically follows these steps:

1. Audit your current pricing structure: Understand all components that contribute to your final price before deciding what to make transparent.
2. Assess competitive landscape: Research how competitors in your niche approach transparency and identify opportunities to differentiate.
3. Choose your transparency level: Decide which elements of your pricing to make transparent based on your brand positioning and customer expectations.
4. Implement with the right technology: Use pricing management tools that support transparency features and compliance with regulations like the EU’s Omnibus Directive.
5. Measure impact: Track key metrics including conversion rates, average order value, and customer retention to gauge the effectiveness of your transparency initiatives.

One critical tool for implementing effective transparent pricing is a robust price monitoring system, which allows you to maintain awareness of market conditions while ensuring your transparent pricing strategy remains competitive.

The most successful implementations also incorporate educational content that helps customers understand the value they receive. For example, outdoor retailer Patagonia combines price transparency with detailed explanations of its sustainable production methods, helping customers understand the relationship between their pricing and their ethical commitments.

Finally, remember that transparency isn’t an all-or-nothing proposition. Begin with strategic transparency in areas where you can demonstrate clear value, and expand your approach as you measure positive results. Most importantly, ensure that any transparency initiative aligns with your overall brand positioning and pricing strategy.

As the retail landscape continues to evolve, transparency will increasingly become not just a marketing tactic, but a fundamental component of consumer trust and brand loyalty. The businesses that embrace this shift thoughtfully will find themselves well-positioned to thrive in tomorrow’s e-commerce environment.