In 2024, inflation remains a reality, forcing supermarket and retail chains to evolve in a highly competitive market where price wars are essential. Offering the most attractive rates has become crucial Too high a price can erode consumer confidence, while too low a price can compromise companies’ financial performance. This challenge is particularly relevant in the DIY sector, where retailers have to satisfy a diverse customer base with a variety of behaviours.
Particularly in the DIY sector, the complexity of pricing is accentuated by several factors:
- These chains have to navigate a wide range of pricesfrom small supplies such as screws to larger, more expensive equipment.
- They also have to manage seasonalityoften complex pricing relationships within the same product category, and highly volatile raw material costs.
- This market is characterized by rapid changes in consumer trends.
- Finally, customers, often seasoned and demanding, are looking not only for bargains, but also for quality products from increasingly responsible brands.
In this article, we look at the specific challenges of pricing in the DIY sector and discuss 5 strategies to attract and retain customers.
We’ll also look at the reasons why optimizing your pricing strategy is particularly complex, and how retailers can respond in the best possible way to maximize performance while satisfying their demanding customers.
Why is DIY pricing complicated?
To understand why DIY pricing is complex, it’s essential to consider several factors that interact in significant ways:
Product diversity
In the DIY activity, the range of products available is staggering. Whether you consider the countless types of light bulbs, the varied palettes of paints, or the multitude of screws and nails available in different sizes and measurements, the challenge is obvious.
Unlike a standard retailer with a few thousand items, a DIY store can offer several hundred thousand. This diversity makes individual product pricing particularly difficult, as well as complicating price consistency between similar or complementary products.
Storage and handling costs
Storing and handling bulky or heavy products, such as wood or concrete slabs, requires specialized equipment. These needs increase the logistics costs associated with these products, thus influencing their final price. The need to maintain this equipmentcombined with managing suitable storage spaceimposes additional financial constraints on retailers’ day-to-day operations.
Lack of historical data
Do-it-yourself items often meet very specific needs, such as tools of atypical sizes or light bulbs with unique characteristics. These products are generally slow-moving, suffer from a lack of robust historical data. This makes demand modeling, inventory optimization and sales forecasting considerably more difficult than for more standardized items, which benefit from more constant and predictable demand.
Seasonal variations
Seasonal fluctuations in demand also affects pricing in the DIY sector. Items intended for outdoor projects, for example, can see their prices rise during spring and summer, when these activities are more frequent. This seasonal variation forces retailers to adjust their pricing strategies to consumer trends, which can make pricing even more complex.
Competitive pressure
Competition between DIY stores, be they superstores or online stores, plays a crucial role in pricing strategy. To attract and retain customers, retailers often have to adjust their prices to remain competitive. This dynamic is exacerbated by price transparency on the Internet, where consumers can easily compare offers, increasing the pressure to maintain attractive prices while covering costs.
These various elements illustrate why pricing in the DIY sector is not just a question of costs, but also of strategy, inventory management, and a fine-tuned understanding of the market and consumer behavior.
5 pricing strategies to engage the DIY customer
1. Pricing based on perceived value
Adopting a pricing strategy based on perceived value is often the key to winning over DIY consumers. These are generally arranged invest more in high-quality productsThey’re not just looking for efficiency, but also sustainability. However, it is crucial that they perceive purchase as advantageous in economic terms. It’s important to distinguish this approach from a simple low-price strategy. DIY enthusiasts often shy away from cheap alternatives, such as inferior paints or cheap building materials that aren’t durable. They prefer products that offer excellent value for money.
Let’s take the example of an electric drill. A DIY enthusiast would rather pay a little more for a robust, efficient drill that will last for years, than opt for a cheap model that might break down after just a few uses. Similarly, for items such as paint, a savvy consumer will choose a brand known for its superior coverage and longevity, even if its price is slightly higher, rather than an economical option that requires multiple coats and frequent touch-up.
2. Suggest complementary products
Starting a DIY project only to discover that you’re missing an essential tool can be extremely disappointing. To avoid this situation, it’s a good idea to group together and highlight complementary products directly on the shelves or on your website. Mark these products as recommendations to guide customers in their purchases. For example, for a painting project, display brushes, protective tarpaulins and masking tape alongside the paint pots.
Offer checklistsThe customer experience can also be enriched by a range of tools and materials for various projects, available either physically in-store or downloadable online. These lists enable customers to ensure that they have everything they need before starting work, guaranteeing that the job is done right the first time. A pleasant, hassle-free customer experience increases the likelihood that they will return to your store for future projects. Well-informed salespeople who can anticipate consumers’ needs and advise them effectively are essential. to boost customer satisfaction and loyalty.
3. Digital promotion strategies for the DIY sector
More and more people prefer to do their research online before visiting a physical store to make their purchases. What’s more, once on site, 59% continue to use their cell phones to consult detailed product information. To address these buying behaviors, it’s beneficial to combine the in-store shopping experience with the benefits of digital options.
For example, the implementation of QR codes alongside products can enrich the customer experience by providing complete and immediate information on items. Likewise, offer exclusive promotions or discounts via mobile can encourage customers to choose your store or online platform over other online retailers offering cut-rate prices. These strategies create synergy between digital and physicalincreasing engagement and sales.
4. Bundle pricing
Marketing products in bundles is an effective and widely adopted pricing method, especially in the DIY sector. This technique consists, for example, in selling a drill accompanied by its set of drills, or an electric saw with various blades included. What’s interesting here is that these offers don’t follow a fixed standard: each store can propose its own combinations.
This practice seems to be ubiquitous, as bundled offers have proved their worth. Indeed, most consumers, whether DIY enthusiasts or not, appreciate the feeling of getting more for their money. Sets offer this advantageous perception.
Do-it-yourself activities often require a variety of tools and materials, batch purchasing simplifies the process by grouping together the necessities. This is not only a convenience advantage, but also a significant time-saver for consumers, making these offers even more attractive. However, it’s crucial to note that do-it-yourselfers may be reluctant to buy products they consider superfluous.
On the other hand, including additional elements in batches that are useful for completing projects more quickly can respond effectively to their desire to complete tasks in as little time as possible. It’s a strategy that needs to be carefully thought through, taking into account the specific needs of consumers to maximize the appeal and usefulness of these sets.
5. Good, Better, Optimal" pricing strategy
The “good, better, optimal” pricing strategy “optimal” pricing strategy can be extremely effective in increasing the perception of a product’s value. Take Apple, for example, which uses this approach for its Apple Watch.
The company offers models at various price points: a standard model at around $400 and a super-premium model that exceeds $1,000. Although the $400 model is sufficient for the majority of consumers, the presence of the more expensive option enhances the perceived value of the less expensive model, giving the impression that it’s a good deal.
In the DIY sector, this strategy can be just as beneficial. You could offer a basic product at an affordable price, an upgraded version with additional features for a slightly higher price, and finally, a deluxe version with premium materials or customized options for a much higher cost.
This range of products not only to meet different budgets and needsbut also encourage customers to perceive the intermediate product as the optimal choicethanks to strategic price positioning. By using the price of the most expensive product as an anchor, customers are more inclined to perceive cheaper products as more attractive bargains, thus increasing their satisfaction and propensity to buy.
OptimiX Pricing Analytics: price optimization in the DIY sector
Faced with complex pricing challenges in the DIY sector, retailers are leveraging advanced technologies to refine their pricing strategies. They adopt models based on artificial intelligence (AI) which precisely analyze demand variations and make targeted price recommendations. These models take into account the specific objectives of each retailer, as well as the trends and buying habits of their customers.
Our pricing solution OptimiX Pricing Analytics, enables to optimally adjust prices at various levelsThese include product, key item group, store, sales channel and category. It also provides detailed reports on the effectiveness and added value of these tariff adjustments.
Using XPAThis means that DIY retailers can offer more competitive, fair and value-oriented prices than their rivals. Our efficient price optimization solution is based on an in-depth understanding of customer preferences and their reaction to price changes.
We invite you to consult our pricing experts to explore how our solution can transform your pricing strategy:
