The one “right” pricing strategy? Let’s lay that one to rest

In a recent RetailWire discussion, the topic of everyday low pricing (EDLP) came up in the context of food retailing. The issue is whether “the best” strategy can even be defined. Although I put the spotlight on general merchandise, there is certainly no “one size fits all” answer to this question. It all depends on the rest of your retail strategy:

It’s probably valid that too many overlapping promotional strategies only serve to confuse the customer. In the world of general merchandise, Kohl’s (for example) is working to simplify its multilayered promotions through its new loyalty program and mobile app. But there’s no doubt that “the thrill of the hunt” drives department stores’ business, and JCPenney learned the hard way about the cost of switching to an EDLP approach.

Meanwhile, other retailers depend on EDLP as a key piece of their overall strategy, whether in groceries, consumables or apparel. It’s not just Walmart that avoids sales on top of EDLP, but off-pricers and some fast fashion stores. So choosing which is the “best pricing strategy” depends — as usual — on the rest of your strategy and what drives your sales and profits effectively.

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