Pricing for the
home and DIY industry

Pricing families

Products within a product family such as paint cans, available in three different sizes need to be priced with each other in mind. For example, a 1-litre can of paint should not necessarily be more expensive than a 3-litre can. 

Our approach: Each product family can be assigned a parent product. The pricing for the parent product, as well as for the entire product family, can then be established based on a percentage or absolute difference. These determined prices are subsequently imported into the Omnia tool, serving as "fixed prices" for products within the respective families.

Bundle pricing

Selling products in Bundles is a well-established pricing strategy, especially in DIY assortments. Drilling machines with a bit set or electric saws with fitting blades are just some examples. The challenge is that bundles are not standardised, i.e. every retailer might offer different bundles.
 
Our approach: Choose to have a competitive price for the main product of the bundle, e.g. the drilling machine or the electric saw, and easily add additional pricing rules for any other item in the bundle via our dynamic Pricing Strategy Tree™.

Channels or price frequency

DIY stores are often omnichannel, having both a physical and an online location. Without electronic shelf labels (ESLs), it is difficult to reprice both channels simultaneously as offline stores are usually very large in size and hold a large amount of products. Differences in price between their online and offline channels can result in confusion and frustration for customers.

Our approach: Omnia can set up a dual report whereby we export all pricing changes to the customer’s online store and a selection to their offline stores based on, for example, popularity, page views, and so on, to reduce the workload for the employees. In addition, rules can be set in which the online stores’ prices can change based on the market prices, but cannot be more than a certain percentage cheaper than the offline stores’ prices.

Seasonality

Home and DIY stores often sell products that are highly seasonal such as an outdoor lounge set during Summer or insulation material during Winter.

Our approach: Omnia may use page view data through a feed from the Google Analytics API to identify products that are in and out of season. Using these values, you can reprice in line with the customer’s buying behaviour for seasonal products.

Stock and delivery

Delivery costs of competitors are highly relevant because some items often carry higher delivery costs. In addition, customers often want to see the item in-store first, in this instance, click-and-collect may be more interesting for the DIY category than in other verticals.

Our approach: Through extracting shipping costs, a vital component in formulating a dynamic pricing strategy dealing with delivery-related pricing, we can optimise pricing based on this total value. We can also factor in inventory considerations to aid in further optimising inventory age, quantity, and turnover rate.

Cross- or up-selling

Upselling is a technique used to persuade customers to purchase a more premium version of an item with the purpose of driving a larger scale. With strategic upselling, merchants can increase average order value (AOV). This is highly relevant for DIY as almost all products can be found with multiple sizes (product families) or multiple levels of quality or complexity.

Our approach:  On the one hand, psychological pricing strategies like Anchor Pricing or Decoy Pricing help you to stimulate cross- and up-selling, but they are more on the marketing side of things. Omnia can help you to implement this as a concept over your full assortment so that the next bigger variant or higher quality item of a product type is always priced at the right distance from the other. This ensures psychological strategies can unfold their desired impact. Furthermore, you can feed popularity scores or sales data into this logic, in order to achieve an even more holistic approach to psychological pricing.