Paul Milner, Marketing Director, Displaydata
One of the advantages that online retailers have over bricks and mortar stores is
the ability to change prices quickly: one well-known online brand amends its pricing 2.5 million times a day.
In the store, retailers need to prioritise pricing as they only have a finite resource – in the
shape of their staff – to make changes. So, for example, with grocery retailers, the daily markdown of perishable goods is not only essential, it also reduces the scope to launch promotions in other areas of the store. There are more reasons, too, why a manual approach to pricing could impct the competitiveness of physical stores.
A manual, time-intensive approach to pricing means that it’s difficult for retailers to:
• Enable every day low pricing: It’s not easy to implement ‘every day low pricing’ and price match competitors in real-time.
• Launch promotions: Promotions have to be planned long in advance, when, for example, macro events – even the England football team doing well (it may happen one day) – mean that it would be advantageous to instantaneously launch an offer across one store, or any number of stores.
• Avoid flash sales: It may not be possible for retailers to graduate price reductions across all SKUs. So as seasonal items come to end of line, if many are left in stock, the only option is to dramatically cut pricing with margins taking a hit as a result.
• Align prices: Retailers have made great strides in recent years in aligning their channels so that it’s easier for people to buy, try and return goods in ways that are convenient to them. However, pricing systems are still not linked in some instances, creating the scope for a price online to be different in-store. Any such disparity undermines consumer trust and strengthens the perception that prices are generally more competitive online.
• Free staff to spend time better serving the customer: Staff are often tied up doing re-labelling of price and promotions or with inventory tasks – all of which reduces the time they have to spend with customers.
A NEW WAY TO PRICE IN A FAST MOVING WORLD
When you think about all the money we spend in retail on attracting customers – the store environment, advertising, seasonal sales and much more – one area that hasn’t dramatically changed for years is the shelf-edge. While retailers have moved to printed price labels, which look better, the fact is to change them still requires manual effort. We know one large retailer that calls in all its staff over night shifts on a weekend just to mark down for its seasonal sales – can you imagine the cost and the disruption for staff?
There’s something else important at play here too: around 90% of all retail transactions still take place in-store. It follows that the shelf-edge, where 76% of purchase decisions are made is the last, and perhaps most powerful, opportunity of all for retailers to influence a buying decision.
We think there has to be a better way to manage pricing, and moving to Electronic Shelf Labels is it. The labels support super agile pricing – pricing and promotions can be amended on a PC at head office and changed remotely on any shelf-edge, anywhere, in seconds. The labels can also be used to help your teams more efficiently manage tasks such as merchandising, stock management and replenishment. It’s a far more agile way to make the most of your price and promotion strategies.
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