Lack of a Demand-Centric Pricing Strategy is a Big Stumbling Block for Retailers

Best-in-Class retailers are responding to competitors including the likes of Amazon by undertaking price changes in close to real-time by using advanced competitive pricing analytics, price elasticity analysis and in some cases even using smart shelves for real-time dynamic pricing updates. Dynamic pricing takes a consumer’s perceived ability to pay for a product. On the other end of the spectrum, most other retailers are facing the wrath of unrelenting promotional pricing pressures and sub-optimal markdowns that are hurting operating profit and margin. Lack of optimization and dynamic approaches in pricing, promotions and markdowns gets translated into loss in operating profit, gross margin and inventory turns. Despite having the knowledge that effective pricing and promotions is the key to remain competitive, both large (turnover over $1 bn.), and mid-market retailers (turnover between $100 mn. and $1 bn.), have faced challenges in such implementations. EKN surveyed 105 softlines and hardlines retailers in November 2016 of which the larger retailers highlighted the top 2 challenges as (1) lack of actionable pricing & promotion analytics to drive profitable decisions and (2) inability to measure pricing or promotion effectiveness and financial impact. For mid-market retailers, the main challenges faced are (1) increased vendor costs and ineffective vendor negotiations and (2) inability to connect pricing, promotions and markdown approach to a company strategy. It is quite evident that large and mid-market retailers are struggling to connect the dots between pricing and promotion effectiveness and profitability. Is a more dynamic pricing approach the answer to the retailers’ problems? Retailers have tried to adapt themselves in this dynamic environment by resorting to frequent in-store price-related changes which...

Engaging Connected Consumers through Location Insights

Retailers can no longer be left in the dark about consumer shopping habits in the store. The most successful retailers will be the ones that have intimate relationships with their customers, especially those that are typically harder to track in-store throughout the purchase cycle. Download this whitepaper that illustrates how a store’s existing Wi-Fi data and insights can help monitor in-store customers and define the specific areas of the store, staffing focus and merchandise that keep these customers returning. Download Full...

Infor is Onto Something

  A few days ago I received an invitation to attend Infor’s Retail event for industry research analysts and media in NYC. Of course, hearing from none other than Whole Foods, an Infor Optiva user, was a personal draw for me at this event. I must say I was both pleasantly surprised and curious about Infor’s rejuvenated strategy in retail. If true, this company’s vision and journey in retail could be termed as “disruptive”, especially because one doesn’t hear a lot of transformative software big ideas and follow-through action from ERP companies every day. However, I am now waiting for the real story from many more Infor customers. If what we heard comes to fruition, Infor retail users will experience several enhancements to Infor solutions that are deployed at retail home offices, stores and distribution centers in the foreseeable future. Briefly, here are my top two takeaways from the event and I will follow-up with some more updates during or just after NRF 2016: The digital and user-centered design strategy of Infor is driving a sizeable UI/UX upgrade for some very traditional and legacy retail solutions such as merchandise planning, PLM, CRM, financials and others. For example, within merchandise planning, changing up the complicated multi-attribute based planning tools is not easy. However, Infor demonstrated some interesting elements including functional diversification to the planning templates, look and feel changes, and user-level task integration tools as well as reminders/alerts for pending tasks. All these changes are geared towards one goal- simplification. Uber cloud enablement across all retail and other applications is a refreshing and welcome piece of news and one that is expected now from all enterprise and best-of-breed retail software companies as it promotes increased scalability and time to market. However, what clinched it for me was the...

Analytics in Consumer Goods

Even as leaders such as P&G and Amazon (in Retail) further embed analytics into the very fiber of the enterprise, consumer goods companies in general have yet to consistently connect strategy and organization design with investments in analytical tools. The result is an insight-rich, outcome-poor industry that struggles to demonstrate ROI on analytics investments. EKN’s Analytics in Consumer Goods industry benchmark is based on a survey of 60+ executives across a variety of consumer goods categories and business functions. Key findings include manufacturers’ inability to build upon early analytics maturity due to lack of clarity of strategic direction. The report includes a detailed maturity framework manufacturers can use to assess where they stand as compared to industry leaders such as P&G, as well as a prescriptive action roadmap to direct strategic action. Download Full...

Only the Nimble Survive.

In his now viral “4 Horsemen” video, Professor of Clinical Marketing at NYU Stern Scott Galloway boldly proclaims that pureplay retail of any kind – online-only or brick and mortar only – is dead. We agree. Not many will argue that retailers need to combine online and offline experiences and deliver an integrated, personalized experience to shoppers. In fact, according to EKN’s annual Future of Stores industry benchmark, 97% of brick and mortar retailers believe they can leverage stores as their strongest differentiator against online-only retailers; yet, 82% rate themselves as being significantly behind, in terms of offering consumers flexibility and speed of order fulfillment. When it comes to delivering a seamless, “phygital” customer experience, why is no longer the question. How retailers transform, and what specific capabilities they need to prioritize are less clear. Towards this end we’re excited about upcoming global research we’ve partnered with IBM on. Together, we’re exploring the definition and business value of “agility” from a retailer and consumer product manufacturer’s standpoint. We’re attempting to build greater industry specificity around an otherwise esoteric concept, specifically focusing on agility as it relates to: Quickly adapting organizational culture, structure and processes to changing market trends. Market leaders across categories are being challenged by dynamic new business models that will force them to quickly evolve or lose market-share and customer stickiness. Securely integrating new technologies into the enterprise IT architecture. The increased use of consumer devices and services in the enterprise, the imminent rise in the number of connected devices, lack of standardization of technology platforms across the web and mobility spectrum, and the increased adoption of...