Retailers, particularly those with stores, face a difficult challenge in supporting consistent pricing across all channels, since digital commerce pricing can be easily changed multiple times per week, day or hour. In contrast, changing in-store pricing of products during the sales day can cause considerable confusion and frustration for customers and associates. Keeping the price changes synced/consistent with the digital channel must be seamless to be effective.
Labour associated with the manual changing of the prices, as well as cost of materials and timing delays all add up to big potential failure points. There are a few instances where retailers are using electronic price tags, shelving labels, or digital signage to manage price changes in store on a more frequent cadence including every 24 hours, but this still does not meet real-time requirements.
Other retailers are starting to take advantage of mobile applications to manage pricing through personalised offers or post transaction settlement. One example is Walmart, offering Savings Catcher as a function on its customer-facing mobile application. Using Savings Catcher, a customer can submit receipts for review and post transaction adjustment by Walmart.
When a lower advertised price is found, the customer receives a refund in the form of a virtual gift card for use at a later date. Retailers that operate multiple channels know well the issues related to pricing consistency, yet customers demand consistent pricing across channels. Something has got to give, but how do you remain competitive online while managing physical pricing?
In our most recent research, Market Guide for Unified Price, Promotion and Markdown Optimisation Applications, 2018 we begin to explore the future of price optimisation and the growing bifurcation between price planning and pricing execution.
This is largely due to the fact that as soon as an optimisation process is completed it is obsolete, due to the increasingly dynamic nature of online pricing. This will also be reflected in the upcoming hype cycle for retail technologies where a new innovation profile called contextualised real-time pricing will emerge. For retailers, contextualised pricing in real-time is defined as the retailer’s ability to manage and adjust prices for customers in real time, across all channels, based on a wide variety of considerations. These include competitive pricing, promotional cadence, customer loyalty and availability.