The Dynamic Pricing War: Retailers Need Answers in the Face of Extreme Competition

The price of a product plays an important role in purchasing decision of a consumer. To tap this, retailers have showered consumers with unseasonal price breaks and promotions to match up to the unwavering digital and off-price competition. However, what they lack is effectiveness of such promotions which will have a long-standing effect on their profitability. Pricing and promotions need to be rightly balanced by a sound strategy which will give them a better understanding of the consumer. The primer takes a look at the trends and challenges in the industry and provides actionable insights. Download this  prescriptive guide for retailers to maximize price and promotion effectiveness for consumers. Download Full...

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...

Leading the One-Retail Merchandising Through Context Driven Pricing and Promotion

With consumers increasingly ena­bled by personal technology and driven by value consciousness, their shopping habits and preferences have changed dramatically. In response, a Utopian vision of a consistent, seamlessly integrated and customer-centric retailer has emerged. The merchandising function is symptomatic of the larger transformational challenge facing retailers. In order to truly achieve the vision of a single, unified retail experience delivered to customers across all channels, the art and science of merchandising requires a new focus and new capabilities. Retailers will need to evolve the merchandising function to be integrated, across the merchandising process chain, across the enterprise and across channels. In this Point of View, we will illustrate why and how merchandising function needs to transform from a traditional, product-centric retailing environment to one that is integrated and focused on the customer as well as how context driven promotions and pricing can lead the One-Retail merchandising evolution. Download Full...