Get Picky About Price Management

October 2012 Integrated Solutions For Retailers

By Matt Pillar, editor in chief

Being particular about price management ensures you won’t take a price pummeling as channels proliferate.

Price strategy presents one of the most strategic and differentiating competitive levers in retailing. As retailers expand channels and consumer interfaces, how much price strategy tinkering is appropriate? We asked for guidance from Elizabeth Magill, industry marketing director for DemandTec Retail Solutions.

What new price maintenance/ management challenges do retailers face as a result of mobile retailing and e-commerce?

Magill: M- and e-commerce are more dominant and prevalent across retail categories, including consumer electronics, books, apparel, and even grocery. This trend presents new challenges and opportunities on the price management front, including:

1. Consumers are now cross shopping physical stores and online and comparing all these alternatives. This means that retailers are facing more competitors and must track more competitive prices, and manage pricing against more competitors.
2. A result of the rise of m- and e-commerce has been increased price transparency. This has been a challenge since the advent of the Web, but this has accelerated since mid 2010 when smartphones really took off.
3. M- and e-commerce are highly dynamic channels, and it’s simply easier to change a price online than in a store. Retailers must collect competitive data frequently to make sure they are current. And, depending on their strategy, they may need to change pricing more frequently to remain in line with their competitive strategies.
4. Another challenge brought on by the rise of mand e-commerce is the need to have a clearly articulated omni-channel pricing strategy. With all this cross-shopping, consumers are cross-shopping a retailer’s physical store and digital store. Retailers need a consistent strategy that makes sense to their customers.