The retail industry is comprised of big box and massive e-commerce companies that are relentless and ruthless when it comes to competition. With the ability to sell products at aggressive prices to win market share, e-commerce goliaths have cast a huge shadow over traditional bricks and mortar retailers.
The result has been decreased in-store traffic, declining margins, and increased pressure from Wall Street to find solutions.
Retailers need to respond with a precision pricing solution to help them make smarter, faster pricing decisions that will turn around the competitive situation. However, this solution needs to go beyond simply matching prices with online retailers (who are often willing to sell at a loss), because that could put retailers at even greater risk.
Instead, retailers require a sustainable solution that enables them to respond quickly and remain profitable, yet driving organic revenue growth. To identify the precision pricing solution that will serve a retailer immediately and into the future, a complex review and analysis should include:
- Probing the retailer’s merchants to gain a deeper understanding of their processes and rationale for pricing decisions;
- Exploring regulatory issues, competitor pricing data, and merchant input;
- Applying sophisticated proprietary techniques to distinguish SKUs that are heavily price sensitive;
- Producing a break-through pricing framework to answer essential questions about price positioning;
- Designing an innovative system to present pricing data and recommendations along with easy-to-use dashboards, reports and time-sensitive alerts.
Following this path can produce immediate organic revenue growth. For example, an initial market test for one client showed an average 6.8 percent uplift where system recommendations were adopted. Moreover, select product lines saw uplift in excess of 30 percent, which equated to tens of millions of dollars when extended across the organization.
In addition to the organic revenue growth, the solution consolidated many considerations that informed pricing decisions, streamlined the jobs of the client’s merchant organization, and provided value across the board.