Black Friday, which is a well-known shopping day originally from the United States, has expanded globally over the years and offers online and offline customers the possibility to buy products for very low prices. Consumers take this date to already tick some Christmas presents off the shopping list and more and more decide to do so from the comfort of their homes rather than the crowded physical stores. This online shopping boom has generated higher competition for well-established brands and online retailers, but also a more difficult start for new online shops that want to gain visibility amongst e-buyers and offer the best prices.
The best solution is the use of a dynamic pricing solution which helps your business have access to real-time pricing data and knowing which prices to set during such a challenging sales period.
In this article you will learn what the current tendencies for Black Friday are, what dynamic pricing is, what its digital solutions are and why your business needs to use this pricing strategy on Black Friday.
This Friday after Thanksgiving falls on the 25th November this year, however, last year’s event showed a trend amongst marketplaces, such as Amazon and Walmart, to start their promotions earlier, which could predict sales starting at the end of October this year as well. The main reason for this shift is the fear of online retailers to have shipping delays or supply issues, which according to the US publisher The Drum can have a negative effect on buyers’ perception of a brand. Apart from the price of the products, buyers also care about the shipping costs and time, which is why having control over this area will make a difference between an unsatisfied customer and a returning one.
If this year’s sales season anticipates Black Friday as well, prices on Black Friday may seem less attractive, but the turnover will exceed the ones from previous years. In 2021 the US market showed less spending during the actual Black Friday than in 2020, but overall consumers bought more during the entire month of November than in the previous year. The UK, for instance, experienced the biggest sales during Black Friday so far.
According to Adobe and Amazon, products from the Electronics category were amongst the best sellers last Black Friday, although Amazon also stands out with discounts in several categories, such as fashion and toys.
Another trend which has been criticised by many media outlets but still exists among giant retailers is the price increase a few days before Black Friday to make the new price look more appealing to customers. This phenomenon generates higher revenue for companies, but might be endangered by public opinion in the future.
After looking at these predictions, it is important to know how you can decide on the best prices for your products during Black Friday 2022.
There are several pricing strategies used by retailers and brands throughout the year. When it comes to the End-of-Year sales, marked by days like Black Friday and Cyber Monday, the pricing strategy which best suits the ever changing prices at a fast-paced speed is dynamic pricing. The advantage of dynamic pricing is that it adapts your products’ prices to market changes, unlike static pricing, which always is the same. This helps brands and retailers stay competitive in the market and adjust their prices according to their competition. If the majority of your competitors sell their products above your prices, there is a very high chance that customers will choose your items over theirs.
Adapting your prices to the continuous changes in the market during Black Friday can be very time consuming and exhaustive, therefore companies use price intelligence solutions, designed to suggest the best price in real-time according to predefined rules. If desired, companies can reprice their products automatically as well by using a repricer software. This solution is very useful during End-of-Year Sales, as prices are changing very fast.
Thanks to a dynamic pricing solution you can define to be as cheap as your main competitor, in order to protect your profit margin, and apply this rule on all marketplaces (like Amazon or eBay) and marketing channels (like Google Shopping or idealo). The software will send you notifications every time your competitors’ products are getting promoted, giving you a competitive advantage and helping you reach your goals.
If you know the prices of your competition, you have the knowledge to set more attractive prices than them, without of course risking your profit margin. According to a Big Commerce study, 87% of American shoppers rank price as “very” or “extremely” influential in determining where they shop, so making sure that yours are cheaper than the rest should be on your priorities list for the next Black Friday campaign. At Lengow our dynamic pricing solution Netrivals has helped 80% of our customers reach an increase in sales and Amazon Buy Box ownership in the first two weeks. Additionally they experience a +90% additional revenue thanks to the optimization of their Google Shopping Campaigns.
Dynamic Pricing is a key pricing strategy for Black Friday, especially in the online world as prices change constantly and companies need to offer the best and most competitive prices in their market.
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