Home Goods Retailers
Identify trends in pricing/promotional strategies among home goods retailers in the past four years, including what changes in consumer preference these trends are related to. Provide an overview of the pricing/promotional strategies through the last four years for the following major home goods retailers: Bed Bath & Beyond, Ikea, Wayfair, Hobby Lobby, Walmart, Target, Home Goods, Cost Plus World Market, Home Depot, Amazon.
- Ikea's pricing strategy involves deciding on a price for a product before the product is even designed, and then designing the product to hit that price target, according to a 2016 article from Business Insider.
- Using this approach, Ikea focuses on creating products that as sustainable and as high-quality as possible at a given price point.
- A 2018 article on Ikea reports other components of Ikea's pricing strategy: "flat packing," in which customers buy items in boxes and assemble them at home; bulk production; optimizing transportation and storage; and minimizing in-store employees by creating a self-service atmosphere for customers.
- One key to Wayfair's pricing strategy, according to a 2017 report, is that the company sells the same items at different price points depending on the platform and target audience. For example, the company might sell the same desk on Amazon for $150, on the Wayfair website for $200, and on the Birch Lane website for $250.
- Wayfair also adjusts its prices on a daily basis using an automated algortihm. This algorithm takes into account factors like seasonality, competition, and availability when setting prices.
Bed Bath & Beyond
- As of 2018, Bed Bath & Beyond (BBB) was transitioning to an automated, dynamic pricing strategy using machine-learning technology. The company first rolled out this technology on its website and then began implementing it across all channels. This technology enabled the company to adjust prices regularly based on market demand and other factors.
Proposed next steps:
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As the initial research only touched on the pricing strategies of a few companies, we suggest additional research to perform a deep dive into this topic. First, your research team will provide an overview of trends in pricing/promotions in this segment over the past four years, including the consumer preferences that have shaped those trends. Next, we'll provide details on each company of interest, looking into their pricing/promotion strategies, current and over the past four years; if and why that strategy is or is not working; and the target audience of that pricing strategy and why it's a good fit for that audience.
Alternatively, we can focus primarily on providing an overview of pricing/promotion strategies in this industry as they've evolved over the past four years, highlighting relevant examples or case studies to illustrate each trend, but without a deep dive on any particular company.