Very generally, there are two main generic marketing categories of marketing-pricing strategies for gaining a competitive advantage: low cost or differentiation.
Low cost strategies need high volume & low costs model to succeed. The advantage of this kind of strategy is that it's fairly predictable. All else equal, if you lower your costs, you will sell more. It's easy to know where you stand in the market by comparing your prices to your competitors'. "Marketing" (promotion, branding) is easier. If your prices are the lowest customers will find you. Amazon & Ebay become viable options for reaching customers.
The catch is that to lower prices you need to lower your costs and in retail much of your costs can be hard to affect. Scale, efficiency & inventory management are big factors here. Capital investment usually plays a role.
Wal Mart, Dell & Aldi/Liddell are great examples of different ways well understood businesses followed low cost strategies successfully. It may be useful to read case studies about these.
Differentiation strategies are about making your product (the retail experience, not necessarily the physical product you sell) different in some way that is valued by your customers and makes them willing to pay a little more. These strategies usually focus on margins more than volume. This is usually more suitable for smaller businesses. For example, a small e-retailer with 200 orders per day can differentiate by calling all customers 3 days after shipping to create a personal experience. Amazon.com cannot.
Deciding which strategy is your strategy is important. Most large successful companies are in one camp or the other.
Within each of these strategies, you also need to decide on a price. The ideal price is where margin X volume is highest. The problem is that you don't know exactly where that is. To find out you can use short term promotions and specials to crudely measure demand elasticity. Promotions are also useful for price discrimination purposes, getting in price sensitive customers without losing potential revenue from price insensitive customers. Basic microeconomics is very helpful here.
Reading & Learning
1 - Michael Porter is the academic that came up with the vocabulary for this: http://en.wikipedia.org/wiki/Porter_generic_strategies#Focus_or_Strategic_Scope
2 - Seth Godin Is a famous modern marketing guru with popular books & a blog that are almost exclusively about differentiation. sethgodin .com
3 - Case Studies are (IMO) the best way of learning about low cost strategies. Reading about companies obsessed with giving customer value for money will drive home how this strategy influences every aspect of the business. They all find different ways of doing this.
4 - Basic Microeconomics is useful for retailers and will help you develop good thinking habits for approaching these questions like thinking in curves & considering everything "on the margin." Try https://www.khanacademy.org/science/microeconomics