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Retail e-commerce sales worldwide —
In resent years, eCommerce retail sales were more than $5.21 trillion. This value will only keep increasing in the coming years. The primary reason is the benefit eCommerce holds over traditional retail. An individual in the US can easily order a product from China using websites such as Amazon, AliExpress, and others. Secondly, people can buy everything online using their smartphone.
While all this is perfect from the buyer’s perspective, the sellers are facing a challenging time. As users have so much choice, eCommerce store owners must come up with novel ways to capture user attention. Otherwise, they will quickly fall down the pecking order. So, how can eCommerce store owners stay ahead of the competition?
The traditional way is to offer a compelling product lineup. What does it mean? Offer products that are quite different from the competitors. Of course, these products must resonate with the target audience. Another point of differentiation could be the quality. By offering high quality to the audience, a store can pace ahead of the competition. Nevertheless, these are not sustainable.
Why Magento 2?The reason we are focusing solely on Magento 2 is because it is a powerhouse among eCommerce platforms. While WooCommerce and Shopify are popular alternatives, Magento 2 is simply the superior choice when it comes to creating fully customized stores. It is scalable and flexible enough to cater to stores of all sizes. Lastly, its modular architecture allows for easier integration with extensions.
Magento 2 is only good as your eCommerce hosting provider. So, choose the best provider to realize the maximum benefits of Magento 2. Coming back to price optimization, store owners have a wide range of options in this regard. They can even opt for ‘Magento 2 Hide Price Module’ functionality which allows stores to hide prices. The purpose of this feature is to create interest in the products and compel them to sign up.
After they sign up, store owners can use various promotional tools to convince them to complete the purchase. For instance, the store can offer them special discounts, send them promotional materials, and a lot more.It is a great way to get users to sign up and increase the probability of conversions. Many top eCommerce stores now use this strategy.
Before discussing the top three Magento 2 price optimization extensions, let’s develop a comprehensive understanding of the concept.
What is Price Optimization?One way to price a product is to consider all the costs and then adding a profit margin to it. This is the easiest way to price a product. However, it is not feasible nor desirable. There are several reasons for it. For instance, customers don’t always base their decision on the pricing alone. They may consider factors such as brand image or perceived value of the product when contemplating a purchase.
By opting for the simple cost-plus pricing, store owners are letting go of an opportunity to realise better returns. Therefore, product pricing needs to consider various factors. This is where price optimization plays a crucial role. It involves setting a price that keeps a balance between customer expectations, market factors, and store revenue requirements. This price benefits everyone equally.
Now, let’s talk about the extensions that store owners can use for price optimization.
Top 3 Magento 2 Price Optimization Extensions:
1. PrisyncAs said earlier, an eCommerce store is not only competing with online and physical stores in the same geographic area, but well beyond it. If a customer in US can order an iPhone case from China, it means that case-sellers in US and China are direct competitors. Manually tracking each competitor is not only impractical but impossible. By the time a store manages to track all URLs, the prices would have changed.
This is where Prisync can prove valuable. It tracks more than 5 million URLs every day. Store owners can use this extension to track their own and competitor prices. It allows you to create rules based on which the extension will automatically change your product prices. The pricing starts at $99 for up to 100 products.
2. Better Tier PriceAs said earlier, pricing is not only about earning a profit. It is much more than that and includes managing customer expectations. This Magento 2 extension allows store owners to set up dynamic pricing, bundle discounts, and a lot more. Store owners can set optimize prices based on various attributes, such as product quality or bulk purchases. It can be bundled with specialized discounts for loyal customers or specific groups.
Dynamic pricing is not a guarantee of success. Store owners must continuously monitor store performance. This extension provides detailed real-time reports, allowing the owner to optimize the strategies promptly. This extension is quite easy to set up and does not require any technical assistance. The price is set at $236. Contact the vendor directly to negotiate a better deal.
3. Price Per CustomerWithin one geographic area, the conditions would vary from one state to another. For instance, the tax bracket might differ or the average household income. Thus, it makes no sense to offer the same price all users. It goes against the concept of price optimization which calls for considering market dynamics when determining a product’s price. This extension resolves this problem. It allows store owners to price products based on customer category.
For instance, a customer buying from Area A will pay a different price than a customer from Area B. Similarly, the extension allows you to set up special discounts for loyal customers. For instance, if a customer is buying a product for the third time, the store can offer a special discount. It also allows the owner to set up special prices for all products rather than set the criteria for each product individually. The Magento Open-Source version extension is priced at $199, while installation charges are separate.
Bottom LineGiven the ever-increasing competition in the eCommerce industry, store owners need to come up with novel ways to remain relevant.
This article discussed how price optimization can benefit a store and its target audience.
The above 3 extensions can prove highly effective in helping you set up dynamic pricing. Of course, you will need to tweak the strategy until you find the best fit.