Increased e-commerce forces brands to rethink pricing - this is how B2B companies succeed with their pricing strategy

Dynamic pricing in e-commerce is the new topic of conversation and has been further actualized in most markets with increased production and purchase prices passed on to the end consumer.

For an increasingly price-conscious end consumer, the transparent online prices are even more interesting than before, which in some cases drives the price picture downwards. This means that B2B companies, in the form of both manufacturers and brand owners, feel that they have effectively lost control over pricing even further.

Traditional pricing for retailers is based on "brick and mortar", where different physical stores could get different price lists or discounts, and where each individual store's pricing to end customers and various campaigns only had a limited geographical impact.

Now that we have a digital business landscape where all prices are transparent due to e-commerce, each store is no longer an isolated island. Smaller stores without volume, which previously could not influence the price picture, can now suddenly discount entire brands, and the larger players with volume are to some extent forced to follow suit.

In the past there has often been a "blame game" and from the B2B company's perspective it has been difficult to get an overall picture of what is happening and who is actually doing what. This has led to involuntary passivity, which creates frustration with e-commerce even though it is a channel that drives volume. Through smart tools and solutions, it is now possible to follow the price picture of all players, which creates different conditions for B2B companies.

Although B2B companies are not allowed to influence their customers' pricing, there are ways they can work to avoid damaging their brand. These are methods that some people are already working with today, more or less consciously.

The smaller retailers without an established brand have shown through their actions that they cannot keep prices up using their own brand, but must only sell on price.

By B2B companies working with a clearer segmentation of customers, but also clearing the ranks based on the retailers' potential to drive volume at the "right price", and by working both with the whip and the carrot, they can raise the price image of their products at the dealers they choose to retain.

How this then affects sales as retailers instead choose to highlight other, perhaps less expensive, products is a reality that brand owners will have to contend with.

Brand strategies and price perception is a long-term and obviously more complex work than described in the text above, but it is in the interest of both the brand owner and the retailer to be able to sell attractive brands while the volumes are "right", but which opens up for cheaper competitors and private label at the retailers.