Price Transparency calls for Dynamic Pricing
Continuing our discussion of the influence of the UK post-Brexit economic situation on retail (previous blog), let’s look this time at what is happening with shopper journey. Here’s a stunning fact: more than half of shoppers (55% of all UK consumers, to be exact) – according to the same Revionics-commissioned Forrester Consulting study we referenced in our earlier blog[i] – compare prices online or from the other stores circular or website before going shopping! And though it is a habit well ingrained in most Europeans, for the UK consumers it is driven additionally by the increasing need to save on the food basket, due to rising costs and falling disposable income.
As a result, the shopper journey in the UK becomes more and more unpredictable and dynamic; traditional loyalty schemes no longer work, and each day the shopper discovers new channels and opportunities that weave into his/her journey.
Some of these channels are new and emerging brick-and-mortar formats, a growing number of new shopping options come from online players, and while in the rest of Europe grocery shopping is not yet heavily influenced by online trade, in the UK the role of online sales in food is significantly higher. The research numbers confirm this: 62% of UK shoppers expect offline and online prices for grocery to be consistent. To compare, the same responses in France and Germany measure 33% and 28%, respectively.
For traditional grocers, this means that they can no longer disregard online competition, which brings in new “rules of the game” in many aspects, but primarily in the approach to pricing. The only way to compete for the dynamic choices being made by shoppers is to adopt dynamic pricing.
Dynamic Pricing has three distinct characteristics – it is:
- Targeted and smart, focusing on updates on those items where shoppers are most sensitive to prices and to competitive offerings
- Flexible in frequency, allowing price changes to happen at a speed that matches your business parameters
- Structured for a fast and automated process, leveraging self-learning, science-based algorithms and automated workflows
All of that enables the retailer to aggressively compete in a fragmented, yet hostile competitive landscape while investing wisely to create and sustain a long-term business strategy.
We invite you to reach out to us: we are here, open for dialogue and equipped to create an individual set of recommendations for each retailer – whether you are grocery, fashion, DIY, home improvement or another retail sector. Contact Us.
[i] Understanding Retail Customers’ Pricing Expectations and Tolerances, a May 2017 commissioned study conducted by Forrester Consulting on behalf of Revionics.