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Why “show rooming” and online retailers are hurting smaller stores profit maximization It used to be that customers might compare brands, but in recent days, most of the time customers bought a brand, such as a Schwan, based solely on the brand’s good reputation. Today, shoppers want to compare competitor’s pricing to see who’s offering the best features on a product they are interested in. They may not always buy from the competitor who offers the cheapest competitor’s pricing either. How can retailers use pricing strategies to their benefit when the rules of profit maximization have changed and larger retailers are pushing smaller mom and pop stores out of business? Is there a trick to making profit maximization work for smaller retailers, as well as it works for the larger retailers? How can smaller retailers use pricing strategies to their advantage? Retailers may be able to turn the tide against “show rooming” and shrink numbers, which show profit maximization. How can smaller retailers win over customers that might be more apt to buy from a larger retailer, who may better utilize pricing strategies because of their product selection and possibly profit maximization for consumer savings? While it is true the younger generation is more likely to compare shop based upon face-to-face conversations they had with store representatives, they also were the most likely to compare product reviews brought up on a smartphone. Many retailers are beginning to show customers personalized product offerings, based on their previous shopping habits. By offering shoppers more of a personalized experience, smaller retailers may beat out larger retailers. This is why pricing strategies of smaller retailers may help smaller “mom and pop” stores get ahead of larger retailers. Smaller mom and pop stores may also operate on a 1 percent operating margin (as Amazon has done), in order to increase profits. This may help smaller retailers have pricing strategies over larger online retailers. Should smaller retailers also follow Amazon’s online model? By having one-click shopping, smaller retailers may be able to increase their profit maximization, too. This may also help online smaller retailers whether or not they have the cheapest competitor’s pricing. However, shoppers will relate to personalized service ahead of competitor’s pricing and some pricing strategies.
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