Retailers that fail to implement a strategic multichannel pricing strategy, including proactive competitive pricing and multichannel consistency, will continue to lose market share to nimble competitors. Concluding more than a year of complex research targeting more than 10,000 consumers and 100 top retailers my latest research titled Multichannel Retail Pricing Strategies That Separate Winners From Losers offers the most definitive guidance on multichannel pricing.
This research compares retail results derived from various pricing strategies and clearly identifies some significant differentiators. Among the most important findings is that retailers with the most effective strategies don’t rely on customers or store associates to drive price- matching policies. Presenting a significant risk for multichannel retailers, Gartner research published earlier this year (“Survey Analysis: Focus on Customer Basics to Challenge Amazon, as ‘Showrooming’ Is Universal but Not Unbeatable”) identified an overwhelming preference among showrooming consumers for a research-free approach to pricing. Consumers actually appear to reward retailers that they can trust to provide competitive pricing without having to request it from the store personnel. Further analysis indicated that price-matching policies were not converting consumers from browsers to buyers, and in fact, customers are traveling to competitive stores to make purchases, even when a price-matching policy is in place.
Results from the retailer survey support this premise, with the most effective retailers reporting they are 10 times more likely to use a centralized and/or automated method to manage competitive pricing across channels. In an unexpected result, the most effective group was almost four times as likely to indicate that the customer will get his or her best price in the store (29% versus 8%), and they are much less likely to identify the e-commerce channel (47% versus 77%) as offering their best prices to consumers. This appears to be related to their ability to provide strategically competitive and consistent pricing.
Are you one of the 81% of retailers with a plan to implementing consistent pricing in the next 12 to 24 months? If not you are taking a potentially significant risk as we know consumers don’t care about your channels and associated costs.
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