Dollars & Sense

The Price is Right 🛒

When we talk about prices, there are two prices that are important: 

• The price that we charge clients.
• The price our clients charge their customers. 

We normally talk about the former, aka how our prices compare with other competitors, like Shopify or wholesale services like Faire. 

Of increasing importance to us is what our retailers charge their customers.  Walmart recently announced that it was taking brands to account and pressuring them to keep their prices low even if inflationary pressures warrant higher prices. (Read the WSJ article about Walmart here.) Walmart does this because if others in the supply chain don’t do this, Walmart will have to reduce its margin—or raise prices and customers will purchase less at Walmart.  In this way, Walmart is like Bridge: we have to pressure those in the supply chain around us to offer the best prices. We have to pressure our customers to offer the lowest price, otherwise we all lose.

This leads us to ask: How do our indie store clients' prices compare to other websites’ prices? Walmart and Amazon constantly promote that they offer the lowest prices. They spend millions to advertise this message, so we know this message moves the sales needle. We also have personal anecdotes for this. I love lower prices.  The last time I bought books,  I considered the merchant that offered the book for just $1 less.  I signed up for a hotel rewards program that saved me a measly 5%.  One dollar matters. Even one percent matters. 

If a Bridge client with higher prices hurts us, how can we determine for sure that our merchant’s price is higher? Amazon uses bots to crawl millions of sites—including ours, and then it changes the price on its site to beat those prices. We’ve even caught brands sicking bots on us. A brand that is our client sent a bot to crawl our retailers' Bridge Stores.  (It was searching for the same SKU hundreds of times and causing an increase in server load.) We could sick bots on sites, such as Amazon, too. But even if we discover lower prices, we can’t technically tell a retailer at what price to sell an item. But we could collect this data, show it to them, and encourage them to offer lower prices. We want to help our stores offer the lowest prices—or at least be aware of them. 

Features we could offer:

• We can use software to check for lower prices. Amazon routinely combs public pricing information and this helps it offer the low prices.  We can use a software bot to crawl other retailers’ and brands' sites to track their pricing. 
• If we know the URL of a product on Amazon, we can enter that url, and write code to get its price each week.
• We can use our stores as the 'bots.'  On a member's Product Details page, we can allow them to report that they saw an item at a lower price and tell us where.

In addition to the daily pricing, there are sales and promotions that retailers and brands run. When we visit the websites of our top brands, they are often giving out $10 for signing up for an email or offering a percent off.  We would benefit from tracking these sales and discounts and showing this information to our retailers. 

Potential features or services we could offer:

• We could visit the top-40 selling brands’ sites every week, record any promotions, and share this information via a web page called Brand Website Promotions. A store could decide if they wish to match this offer.  We could even shows screen shots of the promotions.  
• We could Google our top-40 selling products monthly and compare them to our members' prices, and then tell our members that sell those items. 

We may be able to turn this tracking information into a reason why merchants join Bridge. We could choose to only show this information to members. A store would likely wish to see this information, so it would sign up for Bridge. 

Sale reps want their stores to sell more. We can share this promotion tracking information with them, too.

Brands may push back and say they don’t want discounting. I’d say we’re simply offering the same coupons as others, and the deal in question may be available on the brand's very own site. 

Pricing goals:

• Help our merchants promote that they have the lowest prices. The only way they can do that is if Bridge does that for them. Indie stores don’t have the tech or people power to do this. 
• Boost sales by offering competitive prices. 
• Bring light to pricing. Currently, most merchants do not know about brand promotions and what the lowest prices are.
• Root out discounters. 

Free Shipping
Per a study that we did, we know that free shipping increases sales by 600%.

Free shipping is a type of discount.  When a customer is going to spend $200 on Juliska, they’re going to buy it from the spot with free shipping. We have to tell our merchants about a brand's free shipping offers by Zola, Amazon, etc.

We may need to update our free shipping settings so that a store can offer free shipping on a select group of brands. For example, one could offer free shipping on brand X, Y, and Z, but not A, B, and C. 

We could alert out stores that they are not competitive in terms of free shipping for a brand. We could make a page that tracks free shipping offers from brands, and show the average at which brands offer this. In our Store software, in the free shipping settings area, we could output these statistics. A retailer could see that brand X is offering free shipping over $Y, so the retailer may decide to offer free shipping over $.9Y. Retailers need to know what they are up against. 

We can ask the brands if they’d like to help provide this information. They are welcome to assist and help the store have this information so their stores can sell more.


Private Sales: Loyalty and Rewards Programs
Brands are most likely to resist when we publicly promote a lower price to all customers. We can offer sales and coupon codes that are not public and limited to a select group. For example, we want to promote sales and offers to past customers. When a customer buys a registry gift, we could email them a coupon for free shipping or $X off or 10% off their next purchase.

There are membership programs that allow customers to get a discount or perks, such as loyalty and rewards programs. For example:

• CVS’s CarePass program offers free delivery and some discounts. It's $5/month. 
• RH gives members 25% off after joining for $175/year. 
• Amazon has Prime, which is a free shipping and digital services (music, movies, etc.) program for $139/year.  
• We can even get inspiration from outside of the retail world: The Venetian hotel in Las Vegas offers up to 5% off if you join their free Grazie rewards program. 

We could allow customers to sign up for a program during the checkout, and get the discount at their next purchase. Our stores could opt out of participating. (We’d not offer a discount by default on registry purchases.)  We could assess if the membership program generates more sales, and if those members buy more often.  A working name for this membership program is "Save Local." How it may work: when a customer checks out on one of 1,100 Bridge Stores, they are opted into a free loyalty program that gives them up to 5% off purchases at 1,100 participating, indie Bridge Stores.  Selling points: save money and help save local communities. 


We have a great network of +1,100 stores and we can help them sell more. Thus far, we’ve not used price as a lever. That is notable because many e-commerce companies are founded on offering low prices. Price is a lever that is ready to be pulled. The time is right to make the price right.

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Homework:
Consider ways that you can make it easier for your business or organization to: run a sale, offer a coupon or discount, or track competitors' prices.
 

Tags:
Save local loyalty program

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