You aren’t crazy. Pricing products competitively, profitably and across multiple channels can prove to be a mind-altering experience. Customers are more knowledgeable and savvy than ever before, making aligning online and in-store pricing one of the biggest challenges retailers are facing today. In this context, how do you ensure your prices stay consistent and accurate at all times and across all channels?
Between your own spreadsheets, waiting for someone else in your organization to provide data that you do not have access to and downloading files from multiple sources, it can take hours to compile and format everything before you get a chance to analyze it.
First, let’s take a look at customers’ shopping habits, which continue to evolve:
Where do customers shop?
Courtesy: Harvard Business Review
- Conducting prior research online on a retailer’s site or competitor sites led to 13% greater in-store spending among omnichannel shoppers.
- In a study of 1000 Gen Z customers almost 60% had used BOPIS (Buy online, pickup in-store) and mentioned that the availability of automated pickup lockers affected who they chose to buy from.
Now let’s examine three simple steps you can take to bring consistency to your omnichannel pricing while keeping your customers, management and shareholders happy.
1. Make Your Data Work For You
Does this sound like yet another day you’ve experienced a thousand times: Someone comes into the office and says, “Sales are down” or “This category isn’t doing well during the promo” or “Why is margin so low on these orders?” Is Product X price-sensitive in Sheboygan, but not price-sensitive in San Francisco? Are in-store customers demanding you match your online price? All the answers are somewhere in your data, but too often it’s fragmented, unreliable or too big to analyze with traditional methods. You need to have the right tools to explore data, to automate analysis wherever possible and “make it talk”. Let your data guide you as to what is working against you and what you need to re-price.
2. Use Levers Wisely
If your only way of competing is to offer the cheapest price, eventually you will end up with a race to the bottom. Your data tells you which channel stands to benefit and which channel stands to suffer as a result of a price change. Think of the levers you can pull when you have a product with slim margins that is price-sensitive online:
3. Always Remember: Value! Value! Value!
While you need to be focused on your customer, you cannot forget what you value as well. What are your revenue and margin goals? Where do you want your customers to shop? Where are you willing to sacrifice so that you can gain elsewhere? The customer/retailer relationship is complicated, but it needs to be of value to both sides if it is to be long lasting.
Simple made even easier
Those are three simple things to do in theory, but we know they’re pretty hard to accomplish in practice. By the time you get to slice and dice your data to identify pricing issues, you are under a tremendous time crunch to determine which lever to pull for each channel. At this point, there is no way to build and test several price strategies before implementing them which often results in extremely conservative price adjustments that don’t align with the overall goals of your organization.
ActiveViam for Pricing tackles these challenges through data science and industry expertise. Our technology allows our clients to analyze retail channel performance faster than they ever have by aggregating data from multiple sources, creating an 80/20 ratio of time spent with 20% reviewing data and 80% taking action to improve their bottom line. With a powerful environment that enables clients to define price rules and run limitless “What-If” scenarios in seconds, our clients have the ability to thrive in today’s highly competitive retail market.