1 Smart Clearance Ecommerce Pricing Strategy Should Increase Total Customer Spend
I observed this example of a very smart pricing strategy for clearance items. This comes from Tennis Warehouse, which has a very clean-looking website. I like the crisp and sharp eCommerce design. I also thought their clearance pricing strategy is very clever.
This pricing strategy is intended to unload inventory while enticing shoppers to buy one or two more items before checking out.
They offer a clearance section and I found this shoe (pictured below) which seemed like a good deal. Unfortunately, they didn't have my size. As I was about to leave I noticed how much I would have saved, it really was a great deal, on sale for over 50% off. From $110.00 at MSRP, all the way down to $49.94
But the actual price caught my eye. It's $49.94. Not $49.99, or $50, or $49. But just under $50.00.
Other items were priced similarly, like this men's polo, also just under $50.00. They had a few other items in clearance like this.
These prices are not accidental
The pricing strategy is intended to make you want to buy more stuff. You'll first get the shoe, then as you go to the checkout you'll realize that they offer free shipping on orders over $50.00.
But when you realize you're total is just under $50.00, this pricing strategy will make you at least consider buying one more item before going to checkout so you get your order with free shipping.
Does this pricing strategy work?
Of course, it does, Amazon uses it, Walmart uses it, it is common practice. Spend a certain amount of money and get free shipping. But the tricky part is getting people to spend more money with you. The magic is in the how.
You may end up checking out and just paying for shipping because it is still a great discount. In contrast, a large portion of shoppers will shop for one more item they may need or want in order to take advantage of the free shipping offer.
When you plan your pricing thinking about stuff like this and you offer discounts and sales strategically, maybe with a coupon or a special sale as in this case, you will trigger those people that want to get “the most out of their dollar.”
Just the mere act of creating this type of sale will force even the most conscientious shoppers to notice that if they just spent a little bit more money, they would end up saving in shipping costs.
When you think about your pricing strategy, ask yourself if the prices, sales, and coupons you're using will entice them to spend more money with you.
There's a great post on pricing over here if you want to dig deeper.
Tl;DR
I noticed Tennis Warehouse has a clearance section. But the items are priced in a way that you are enticed to spend more money. By pricing items just under $50.00, the customer is presented with the choice to buy one more item and get free shipping which only applies if the total customer spend is over $50.00.
This e-commerce pricing strategy has been used “forever” so you should be using something like this on your own store.
In Conclusion
Our advice is to really think about pricing and try to make pricing attractive, competitive, but also a strategic part of your marketing so that you may subconsciously drive the customer to spend a little more money with you.
Now, does it actually work for Tennis Warehouse? I don't know, I don't have access to their information. But I have seen this strategy work time and time again so there's no reason to think it's not working.
By the way, if you need help with your e-commerce website, if it's time to revamp it or optimize it or just need someone to do this kind of stuff, let us know. We can also build one for you. When ready, get in touch.
Photo credit: by Kevin Malik from Pexels
