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The Power of Every Day Low Prices
Many of my friends and colleagues know I am a huge proponent of Wal-Mart’s and their Every Day Low Prices. I frequently have lively discussions about my love for Wal-Mart and their low prices. In mid December, I came across an article that discussed Chicagoland’s grocery chains and their battle for shoppers. The article got me thinking about how powerful Wal-Mart’s “Every Day Low Price” strategy is. Two lessons can be learned from the Every Day Low Price strategy: consumers don’t shop where they are unhappy, and innovative companies are profitable.
Pricing Strategies
Grocery stores primarily use one of two different pricing strategies: High-Low, or Every Day Low Prices (EDLPs).
Stores with “high-low” pricing strategies price some products at low prices, while having other products at higher prices. These stores use promotional sales to lure shoppers into the store in order to persuade them to buy other high priced high margin items by utilizing other marketing techniques.
The competing grocery pricing strategy is “Every Day Low Prices”, or what I like to call, EDLPs. Wal-Mart popularized this strategy and uses it to this day. Prices are set low, and stay low. The only time a price changes is when supply or demand changes, or when the retailer forces the supplier to innovate. Furthermore, if prices do change, they usually go down. Remember Wal-Mart’s “falling prices” marketing campaign? EDLPs have helped Wal-Mart become the world’s largest retailer.
ED HAYES 