NRF Stores magazine recently published an article entitled “How Low Should You Go?” to profile the “ever more-complex world of retail pricing” and focus attention on a known retail industry vexation; the “race to the bottom”. Read the article, with commentary from industry leaders on how to think about retail pricing strategy today.
Knowing What Customers Want and Who You Really Compete with is Key
From this article, there is a fundamental question which should be answered prior to any dynamic competitive pricing response: How sensitive are customers to your prices and your competitive price gaps? The answer identifies which items are sensitive and to what extent; and further dictates whether price matching is even necessary or whether a price range is acceptable. For example, pricing 5% percent above a competitors’ price may not change units sold but most certainly will impact profitability.
According to Dr. Jim Sills, co-founder Clear Demand, “there’s too much pressure, too many variables, channels, competitors and products to continue standard pricing and merchandising practices.” “Leveraging intelligence is about depth, precision, agility – immediate access to information across all channels, all the time.”
Consistency and Relevancy are Critical to Building Trust
To flourish in such a complex omnichannel retail environment, consistency and relevancy are critical in presenting your retail pricing proposition and creating trust with your shoppers. We advocate taking a rich data-centric approach which uses retailers’ sales data and competitive price data to reveal shopper sensitivity.
Read our whitepapers Exercising Retail Price Leadership, and Managing Consumer Demand and Competition across Channels for perspectives on current pricing science and emerging technologies.
Register for our webinar April 21, 2015 entitled “Pricing in an OmniChannel World: A Retailer’s Survival Kit.”
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