Hi-Lo pricing
Hi-Lo pricing is a pricing strategy used by retailers to attract customers by offering sales and discounts on certain products. This strategy involves setting high prices on products initially and then lowering them during promotional periods. The goal is to create a sense of urgency and encourage customers to make a purchase before the price goes back up.
For example, a clothing store may price a new sweater at $50 when it first arrives in the store. After a few weeks, the store may discount the sweater to $30 as part of a weekend sale. This lower price encourages customers to buy the sweater before the sale ends.
Hi-Lo pricing can be an effective way to increase sales and attract customers, but it is important for retailers to carefully manage their pricing strategies to avoid upsetting customers who may have purchased the product at a higher price.
Some retailers use hi-lo pricing as a way to clear out old inventory or generate excitement around new products. By offering discounts and sales, retailers can create a sense of urgency and drive sales during slow periods.
Overall, hi-lo pricing is a common strategy used by retailers to attract customers and increase sales. By carefully managing pricing and promotions, retailers can effectively use this strategy to boost their bottom line.
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