EDLP (Everyday Low Price) Pricing
Definition of EDLP (Everyday Low Price) Pricing
The everyday low price strategy, often used by retailers, offers consumers low prices on a daily basis by eliminating any discounts or sales.
Description of EDLP (Everyday Low Price) Pricing
It involves setting prices lower than rivals and not offering any special sales, so your focus is on maintaining a steady price point over a period of time. Some of the most well-known stores that use this strategy include Walmart and Costco.
Advantages of EDLP (Everyday Low Price) Pricing
This strategy helps ensure consistent sales by training shoppers to expect low prices from your store regardless of when they come in so that they don’t get a cognitive dissonance or fear of going into your store, buying an item at a higher price, then coming back a week later to find the item on sale. Therefore, you’ll have consistent sales, traffic, and you won’t be training customers to wait for your sales promotions.
Disadvantages of EDLP (Everyday Low Price) Pricing
It’s not very profitable, unless you ensure a level of volume, so you need to be selling a large number of items. Also, with the help of the internet, consumers can compare prices with ease online, so if you don’t truly have the lowest prices, you can lose credibility. On top of that, if you do truly always have the lowest prices, you risk selling items at a loss of profit.