We recently worked with Retail TouchPoints on an in-depth report about the state of pricing. One of the statistics shared in the report was especially interesting. It found that 39% of consumers are willing to go out of their way for a better price. Certainly, it is a high percentage but what about the other 61% that make up the majority? The small victory of a sale due to a low price has made retailers price crazy but it has not helped them succeed in building loyalty and long-term customers.
Retailers need to rethink their pricing strategies to succeed in this hyper competitive environment. As Matthew Hamory of KPMG said in the report, “Pricing is about trust. If customers trust you, the odds of them moving to competitors is much lower.” Many retailers need to repair the damage that previous pricing and promotion policies have caused, both to consumers’ trust levels and to their own bottom lines1.
Today, the availability of humongous amounts of customer data provides retailers rich fodder to better understand their customers. Price intelligence has helped many retailers objectively understand customer choices and where they stand in the market. Many have acted upon the insight and used rules-based pricing on their key value items to protect revenue. Promotional strategies are more data-driven and allow retailers to target specific offers at certain segments.
Retailers defining price based on market reference and customer demand are at an advantage. Leveraging price to provide customers the value they want demonstrates care over pushing offers they don’t want. Staying true to value propositions and offering unique product assortments also earns customers’ trust and loyalty. Discounted prices will influence one time sales, but building a loyal customer base requires an exceptional customer experience.
After all, exceptional customer experience is priceless. - As stated in Ugam and Retail TouchPoints’ Price Wars Report.
Download the report to learn how to develop a clear value strategy for customers through enhanced product assortment, better customer segmented promotions and monitored pricing strategies.
2016 RSR Research Report titled: Pricing 2016: Life Becomes Unmanageable.