What movie theaters, ice cream and fast food combos can teach us about pricing, and how you can apply those techniques to improve profits in your shop.
For years florists have been told to rigidly adhere to a cost plus pricing formula – take your expenses, multiply them by certain amount and you have your retail price.
Having a solid understanding of the true cost of preparing and delivering an arrangement is vital, and this costing education has been invaluable to many florists.
But it's still about costing more than pricing, and it doesn't take into account the incredible pricing research being done by psychologists, behavioural economists, the foodservice/hospitality industry and more. The rest of retail has moved on.
This session is about catching up. It uses real world examples to illustrate and deconstruct the powerful pricing techniques being used by the most successful companies in the world and answer questions like:
- What is the best way to express price in writing? New research from Cornell university has valuable insight.
- Why do so many prices end with nines? When should this strategy be used and when should it be avoided? The Ron Johnson JC Penney experience is very informative, especially when looked at alongside the practices of upscale retailers like Neiman Marcus or Bloomingdales.
- Why are some products discounted so aggressively as the pack size increases (movie theater popcorn) while others (rice or peanut butter in the supermarket) are not? How does perishability, necessity and diminishing marginal utility factor into it? And, most importantly, where do flowers fit in on the spectrum? The implications are very different than conventional industry wisdom.
- What are anchor prices? How they are exploited by luxury brands to reinforce their market position and increase sales, and how you can use them the same way.
- What do you need to fear more? The competitor that charges less, or the competitor that charges more? Sometimes there are advantages to being the most expensive, as evidenced by the battle between Easton and Bauer to position themselves at the top of the hockey skate market.
- Why do some price strategies so clearly not make sense? A look at the work of Dan Ariely on decoy pricing, and how deliberately non-sensical pricing can be the most effective at shaping consumer behaviour.
There is no math and no formulas. Participants enjoy seeing the real world examples that surround them all day being deconstructed and experience many "ah ha!" moments as even the most elaborate pricing concepts become clear.
Most importantly participants leave with a new set of tools and ideas they can start using as soon as they return to their shops – things that will help them increase sales and profits immediately, while also improving their brand and market positioning.
This program typically runs 75-120 minutes and can be adjusted to the demands of the show schedule.
Sponsored by FloristWare – Software For Florists
Beyond Cost Plus is sponsored by FloristWare – powerful, affordable and easy-to-use software for florists that will help save time and money while increasing sales and profits.