For those who were unable to view it live, the recent Retail Leader-hosted webinar with guest presenters from Forrester and Revionics gave us an information-packed, fast-paced and very actionable overview of recent Revionics-commissioned studies conducted by Forrester Consulting that show some very interesting intersections – and disconnects – between retailers’ beliefs about their customers and shoppers’ actual perceptions.i
I don’t want to be “that person” who just blurts out spoilers, so I’ll leave it to you to spend one of the most entertaining and informative interludes you’ve had in a long time catching the on-demand replay for yourself. But I will be that witty, insightful virtual cocktail party conversationalist who tosses out intriguing facts and leaves you wanting to linger just a little longer. Ready?
First, guest speaker Brendan Witcher, a Forrester VP and Principal Analyst, explained how the research shone a bright light on disconnects between retailers’ price-matching practices and what shoppers really want: 76% of retailers say they aggressively promote where they undertake price matching, yet only 17% of shoppers say they demand price matches. Who, I wondered, are these retailers trying to reach with their ballyhoo around price-matching? And if so few shoppers demand price matching to begin with, since what shoppers really care about is a fair, non-arbitrary price, don’t knee-jerk price matches needlessly give away precious margins?
The discussion also touched on promotions, where again retailers often default to offers that don’t really matter to shoppers per se. As an example, free shipping as an across-the-board unfocused offer isn’t nearly as effective as when it’s well-integrated into your overall value and loyalty proposition as, say, part of your defined loyalty program.
There’s one area where there is strong convergence, and that’s on the importance of Artificial Intelligence (AI) in retail. Both retailers and shoppers feel strongly that AI has a valuable role to play. In fact a lot of retailers already are leveraging AI in their business models, including price and promotion optimization. If you aren’t already doing that, time is not on your side – you need to start understanding NOW how AI can help your business. And because shoppers are unique, their shopping experiences should be as well – and AI can help with targeted, segmented insights that cater to your different kinds of shoppers.
And while shoppers and retailers alike agree that price is critically important, the research shows that shoppers want a FAIR price, not necessarily the lowest price, because they also factor in value and quality in choosing where to shop.
Revionics’ Chief Marketing and Strategy Officer Cheryl Sullivan picked up the discussion with a focus on what the research showed as a huge margin leak source – 52% of shoppers say they get retail promotions on items for which they would have paid full price. Fortunately, science-based promotion performance analysis can pinpoint promotional waste. Just dialing back ineffective #retail promotions, using cutting-edge analytics, can save retailers millions – instantly. And since some shoppers actually have negative perceptions about these unfocused promotions, it can also protect retailers from alienating the very customers they are trying to engage.
And while retailers tend to over-credit the importance of BOGO offers, in reality shoppers prefer percentage off discounts:
Finally, Cheryl debunked some myths about dynamic pricing by defining what it really is – and isn’t. You’ll hear how successful retailers already use dynamic pricing, but in a much more targeted and impactful way than popular conceptions would assume.
I encourage you to hear from these dynamic presenters for yourself – and be among the very first to receive results from the soon-to-be-released new study. Check it out today! Better yet – join us at Insight 2018 and get the full results first-hand at our annual retail summit!
i Unless otherwise noted, all data is taken from the following studies: Understanding Retail Customers’ Pricing Expectations and Tolerances, a Forrester Consulting study commissioned by Revionics, May 2017; Demystifying Price and Promotion, a Forrester Consulting study commissioned by Revionics, November 2017; Indiscriminate Promotions Cost Retailers, a Forrester Consulting study commissioned by Revionics, May 2018; A Forrester Consulting study commissioned by Revionics, August 2018.