The new paradigm of information transparency and the rise of the empowered consumer present new challenges and opportunities for brands to drive consistent online brand experiences to support effective conversion.
Brands want to ensure their consumers don’t face friction in their buying process on account of volatile pricing. At the same time, retailers want to be competitive and yet rest assured that they are being treated fairly when it comes to meeting the brands expectations or policies. To balance the needs of their consumers and the retailers, brands put in place a MAP policy.
However, the current way of MAP monitoring may be broken or soon turn irrelevant. Here’s why …
1. In this hyper competitive environment, retailers are now equipped with capabilities to dynamically change prices. They are able to change prices within minutes and therefore price changes below MAP may go undetected.
2. With algorithms in place to optimize inventory by changing prices, online retailers are beginning to price at a Style - Color - Size level. This means they may be violating MAP at the ‘size’ level but it goes undetected as the brands are monitoring at a more holistic, say ‘style’ level. MAP Monitoring,minimum advertised price,Online brand protection
3. Tactics like in-cart pricing (“see price in-cart”) though not a violation of MAP are getting more prevalent. Here retailers present a different price in-cart than is advertised, and in many instances is much lower than MAP. This tends to get caught by other retailers, leading to a price war and dissonance in the retail community with the brand. Some retailers who are not able to deal with this dynamism are losing out and feel this is not fair.
4. Proliferation of shopping channels like Marketplaces, Comparison Shopping Engines and the ease of managing dynamism on these channels is making it difficult for brands to track MAP violations. Brands struggle to figure out who is really selling their product. Is it an authorized retailer or an unauthorized one?
5. The growth of personalization is likely to be the single biggest reason the existing way of MAP monitoring will need to be re-thought, as retailers start offering personalized pricing to their shoppers.
6. Promotions as a lever is also being increasingly used as a way of competing on price though not directly. Retailers are getting smarter at deploying effective promotions, bundling, etc. which when netted could be dropping the price below MAP. Many brands are not equipped to detect these trends. Furthermore, a lot of these promotions have more avenues to be distributed viz. social media, newsletters, affiliates, which is further complicating the ability to monitor them.
These six drivers are likely to have a significant impact on the way MAP gets defined, monitored and tracked in the near future.
I will help map these drivers in greater detail in my subsequent posts.
Camilla is a Solution manager at Ugam and is part of its retail analytics team. She oversees the Brand Intelligence solution and is responsible for helping brands use data to inform actionable decisions around pricing, assortment and content. On the personal front, Camilla enjoys singing and would love to be part of a band.