Have you noticed the prices of television sets recently? A good name-brand 32-inch LCD can be purchased for under $700; and, if you look around enough, maybe as low as $300 or $400. Two years ago, these same sets, perhaps not quite as good or with fewer bells and whistles, were three to four times the price. Larger sets have seen their prices tumble by thousands of dollars in the same time frame.
All of this is taking place as sales of these high-tech television sets continue to grow at steady, strong rates. Spurring this growth is the simple fact that consumers want these television sets because they provide a discernable difference from the products they previously used. The old adage that products will move off store shelves if there is a need for them has never been truer than with what is happening in the consumer electronics market.
So why are retailers lowering prices on these television sets, even as manufacturers appear to be begging them to maintain price points? The answer, of course, is market share. Televisions have long been a traffic builder for retailers, who are more than willing to cut prices, and their profits, to get consumers into their stores.
Now with shoppers clamoring over television sets at a pace not seen since the mid-1960s, when color TVs first hit the marketplace, retailers are at it once again. Retailers want market share because they want as many consumers as possible to walk through their doors as often as possible. Sell the shopper a TV and they may also purchase a DVD player and, more profitably, several DVD movies and video games.
The pet industry needs to abide by the same strategy. Pet food has long been a staple of any pet aisle or pet store, and many retailers use the category as a traffic builder, often at the expense of profit. There is as much wisdom in this strategy as there is for those who sell TVs. Get the consumer into the store with a broad selection of pet food items at competitive prices and you have an excellent shot at getting these shoppers to purchase other, higher-margin products.
Market share remains a vital part of any retailer’s strategy. And the only way to gain share is to make sure that you are offering the consumer a reason to come to your store. Pricing is an excellent place to start.