As retailers jockey for position in the competitive marketplace, tactics and strategies that didn't exist yesterday are mainline today -- and will be history tomorrow. Customer, product, supply, assortment, marketing, social, omni-channel, you-name-it. Once a product exists, EVERYTHING revolves around that product, i.e. pricing, price competition and profit -- under the umbrella of marketing. Out of necessity, retail intelligence solutions, competitive pricing and strategy rise as your front-line tools for increasing your pricing power -- regardless of retailer size.
First, what are the existential competitive pricing challenges?
Technology must be used by the majority of retailers...
(1) To set and maintain regular prices; and
(2) For dynamic dynamic retail price optimization
… But even these basics lag far behind, wrote the authors of the 2014 RSR Benchmark Report, The Pricing Paradox, saying, "There's a lot of room for improvement… More retailers need to do more with the technologies available to them":
(3) To intelligently support promotions and markdowns;
(4) To forecast the effects of proposed strategies; and
(5) To measure the effects of the strategies executed.
When it came to pricing, here's what retailers said was most important to them:
(6) Regular price planning, forecasting, and management;
(7) Regular price optimization;
(8) Promotions planning, forecasting, and management; and
(9) Competitive price intelligence.
Retailers noted (in order of importance) that they will want/need:
(10) End-to-end price lifecycle management;
(11) Markdown optimization;
(12) Product movement data warehouse;
(13) Rules-based pricing engine;
(14) Markdown planning, forecasting and management;
(15) Customer data warehouse;
(16) Promotion optimization;
(17) Inventory management - availability as a price driver;
(18) Competitive price intelligence.
But a retailer of any size can't just sit around and wish for these tools and have them magically appear. Here's how retailers envision the evolution of their pricing intelligence usage:
(19) Build up progressively more sophisticated pricing capabilities over time;
(20) Improved integration technology tools;
(21) Business process analysis for pricing process improvement;
(22) Better communication and education of resistant parties or organizations;
(23) Tailor a technology solution to my business process and needs;
(24) Better training to improve pricing skill sets.
Bottom Line For Your Bottom Line:
Ultimately, the key goal for retailers is:
(25) To reach their strategic objectives to improve gross margin percentage while still growing the top line and building the brand image.
But they'd better get a move on it. It's not by chance that the needs and priorities cited above are the raison d'etre of pricing intelligence solution providers, very intelligent people who've anticipated, listened to, and are providing such support systems and solutions to shepherd retailers into a profitable future.
"When it comes to using technology to manage prices more dynamically and more scientifically, there is still a lot more that retailers can – and should – do," said the RSR Report. "The good news is that the technologies available today can really help retailers make the transition… The future will not be won by having solutions so much as in how retailers use them," the study concludes.