![]() How does it work: The most popular products drive foot traffic to your store. The retail behemoth competitively prices the most popular products to lureĬustomers into the marketplace, but makes profits on less popular products. Guru Hariharan, a former Amazon business leader, tells us the truth behind the common perception of Amazon as the cheapest destination. ![]() So, here’s our first lesson to take from the retailer’s pricing strategy. Not surprisingly, Amazon excelledĬheapest seller of any product? Not really. Price transparency accompanied by a growingly price-sensitive customer baseĬompel online retailers to compete on price. They look for the best price, and the comparison-shopping engines find it in seconds. Meaning, they don’t have the extra money to trifle away. Millennials have less discretionary income than the older generations. So, no one buys overly-priced items from a local store just for convenience reasons. Today’s shoppers can compare prices from numerous sellers in a single tab. The first thing about the e-commerce industry is the transparency of prices. But why do they change prices so frequently? Two major reasons behind it: The retail giant makes 2.5 Mn price changes a day, and without a doubt, it works well for the company. Why does Amazon Change Its Prices so Frequently? The data-driven logic behind Amazon’s pricing strategy played a crucial role in their growth, and there are valuable lessons we can draw from it. What’s behind Amazon’s unprecedented success? The use of big data in pricing decisions. This guest post comes to us courtesy of Basak Saricayir, Content Marketer at Prisync.Īmazon’s share of the global e-commerce market hit 13.7% in 2019, and the company accounts for more than half of US e-commerce sales.
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