Why Effective Price Points Are Key To High Sales
Whether you’re just starting out or introducing additional gift hampers into your existing range, getting your pricing spot on is no easy task.
In this article we’ll share some pricing strategies that will help you maximise hamper sales and profits. There are a lot of price point factors, but these five are what we consider key to conversions.
1. The benefits of price anchoring
You may already be aware of this heavyweight pricing strategy which influences perceived value of a product. Essentially, the idea behind this is that items are perceived as cheap or expensive in comparison to either the first price the customer sees or the price of similar products.
The easiest way to implement price anchoring is to create a tiered pricing strategy, by providing different versions of your gift hampers and gift boxes at different price points. This incorporates your anchor prices and allows you to utilise this customer mindset.
To illustrate this, imagine three sized food hampers priced at £25, £50 and £75. Here you are offering the customer good, better and best options. This staggered pricing allows customers to weigh up price against value and choose a gift hamper which is best for them. Often the customer will see the middle option as 'standard' which becomes your anchor price.
When curating a collection that ranges from cheap hampers to luxury hampers, there are many ways you can vary the value of your gifts. Think about utilising different hamper & gift packaging options; card gift boxes are a good economy option; wooden crates are a popular mid-range choice and wicker hamper baskets convey premium and luxury. You can also diversify your range by size; small gift boxes or small gift trays are a good budget option, rectangle gift boxes with lids are good ‘standard’ option and a large gift box has a generous capacity for premium hampers.
2. Creating a sense of value
It's important to understand what it is that drives value for your customers. This could be price, quality, experience, time, brand values or likely a combination of them all. Once you've established this you can determine what opportunities you have to add value.
If it's price, it’s really easy to create a sense of value with a gift hamper range using the price anchoring strategy. For example, consider displaying a gift bundle in a stylish gift box, alongside a retail display of single items. By giving your customer a comparison to the individually priced products they are able to calculate the cost savings of buying in a bundle. This is a great technique for upselling.
If brand values are important to your customers then sustainability can play a factor in the value of your gift hampers too. Shoppers are more aware now than ever of the ethical and environmental impact of single-use plastic packaging and are making adjustments to the way they shop and the choices they make. Reusable gift packaging can instantly increase the customers perceived environmental value of your gift offering. By simply opting for wholesale gift packaging that can be repurposed by the customer, the gift multiplies in worth.
There is a huge choice of alternative eco-friendly gift packaging options including wicker hamper baskets handwoven from sustainable and biodegradable willow, card gift boxes or gift trays with a recycled cardboard core and sustainable bamboo or wicker packing trays.
For customers motivated by quality, you may want to steer clear of flat-pack and single-use budget gift packaging. This doesn't mean you have to wave goodbye to your profit margin; you can take advantage of wholesale trade discounts and you can charge a premium price tag.
3. Differentiate your brand
Different customers will have varying perceptions of your brand value relative to your competitors. As well as the obvious comparable - price.
It's common shopping behaviour to shop around for the lowest price before making a purchase so it's highly likely that your browsing customer would have already compared prices of similar products and will have a price in mind.
You could go down the path of undercutting your competitors, however you then run the risk of always chasing their tail and never being able to set your own price points. This is when a strong understanding of your value proposition can set you apart from your competitors. What can you offer customers that they can't? Offering a unique or personalised gift hamper is an excellent way of creating a product that can't be compared like-for-like, allowing you the flexibility to value and set your own price points.
...And remember, a lot can also be said for customer satisfaction. Customers that have had a positive experience with your brand will attribute a lot of value in your offering over competitors and are usually willing to pay more for a product or service.
4. The value of convenience
Customers want convenience at every step of their shopping journey. Adapting your product range to offer convenience is a guaranteed way to boost product sales and revenue.
Setting clear price points for your gift hamper range is one way to save your customer valuable time during their decision making. Maybe they always spend £25 on Grandma?... There are key gifting price points that you always need to hit. When faced with a selection of similar products with similar price tags, often a customer will find it hard to differentiate the products and the chances of them leaving overwhelmed without making a purchase significantly increase. By offering a selection of hamper gifts at varied price points, a customer is able to quickly evaluate the best choice for them, increasing the likelihood of a conversion.
Often customers will pay a premium for convenience, especially the time poor. Christmas is the most obvious example where shoppers' stress levels soar and demand for ready-made gift such as wine gift boxes, food hampers and wicker hamper baskets peak. Don't underestimate the perceived value of grab-and-go hampers and make sure you factor this into your price points.
5. Maximising margin
Establishing effective price points is pivotal to the success of your gift hamper sales. Your aim is to set price points that are perceived as good value by shoppers but also maximise your profit margin.
We've discussed ways you can increase the value of your gift offering, but you can also increase your profit margin by keeping your costs low.
Buying wholesale is a great way of making large cost savings on empty wicker hampers, gift boxes, wine bottle boxes, wooden crates and more. Access to trade prices can help to keep cost prices low. You can also take advantage of bulk buy discounts by ordering in larger quantities. To discuss our trade discounts contact our sale team on 01278 437123 or email us.
Read of our next article - Themed Hampers & Gifting: 5 Top Tips To Boost Profits or browse the other guides in our Hamper & Gifting E-Learning Hub.
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