Retailers Develop The Right Pricing Strategy for Each Market

Developing the right pricing strategy for each market is one of the critical factors for retailers to successfully expand overseas, according to a report released by Tryzens, the digital commerce solutions company, and Worldpay, the global online payments and risk management service provider.

A range of retailers were questioned – from marketplaces, to niche offering retailers and each specified the importance of developing tailored pricing strategies for individual markets. For instance, Russian shoppers have a high level of sensitivity, and as a result are heavy users of price comparison sites, whereas, Australian shoppers are happy to pay more if they don’t have to pre-register and thus, aren’t as concerned with price.

When asked about global expansion, the retailers agreed the importance of understanding local shopping behaviours, since payment preferences vary broadly by country, for example:
-In Russia, 55.5% of transactions are based on cash. Cash on delivery makes up the bulk of this figure, at 41.2%;
-In China, nearly half of all online payments (44.3%) are made using e-wallets, with Alipay accounting for 30% of these transactions. China is also a marketplace driven eco-system with 80% of digital commerce;
-In Australia, online card payments are the most popular method of payment (53.4% of transactions).

The full report, found here, looks at the key barriers, opportunities and threats retailers face when expanding internationally and was developed from Worldpay data and in consultation with Tryzens and leading retailers.

8 out of 10 retailers asked stated that they already have, or are considering, entering new markets. Rising incomes and improved infrastructure have made emerging markets more attractive and more accessible to retailers. However the risks retailers consider to be the most prevalent in expanding into these markets include: ensuring a good understanding of each country’s rules and regulations; and losing control of the brand.

“British retail brands are thriving overseas, however with every success story there have also been a number of failures,” said Leon Brits, principle consultant, Tryzens. “As the trend to grow internationally isn’t showing any signs of slowing down, retailers looking to capitalise on international markets need to understand the complexities of building a brand presence in overseas markets, in order to be a success story and not a failure.” 

Kevin Dallas, chief product and marketing officer, Worldpay says, “Cross border trade is growing rapidly, but as the research shows, the retail landscape varies extensively from one market to the next. While international customers areonly a click away, it’s imperative that businesses understand regional differences, such as preferred payment methods, in order to tailor the customer experience for best results.”

Tryzens and Worldpay are working together to provide major retail clients with a seamless multichannel experience for their customers.