The retail landscape is more volatile than ever before. Okay, this isn’t exactly news, but one development which has given a lot of brick and mortar retailers pause for hope is price tracking. This isn’t the secret shopping programs from the 1950’s and 60’s. Instead, this is price tracking utilising advanced technologies such as artificial intelligence to give traditional retailers the help they need to thrive in an omnichannel world.
The Case for Price Tracking
If you are a traditional retailer, then you know it all too well – Amazon can execute price changes on a multitude of SKUs with a level of speed and accuracy never seen before. This agility places tremendous pressure on retailers whilst allowing Amazon to hold its margin on a broad swathe of products.
Traditional retailers don’t need to surrender just yet. In fact, a growing number are using price tracking to make strategic decisions which build loyalty amongst its customer base, and by extension increase top and bottom line performance.
You might be thinking that customer loyalty isn’t important, but a recent report from Bain & Company found that only a 5 % increase in customer retention can lead to a whopping 25% increase in profits.
What exactly is price tracking? As the name implies price tracking relies on collecting data from online and offline competitors – at least for starters. Whilst this data helps leaders make better pricing decisions, the killer move is the integration of advanced technologies to improve data analysis and ability to derive actionable insights.
This can include using the insights from price tracking engines to determine the correct timing for promotional campaigns or better ways to build on customer loyalty initiatives. While you might think price tracking is a tool solely utilised by online retailers, the reality is that tech-enabled price tracking represents a massive opportunity for the brick and mortar sector as well.
Price Tracking for Brick and Mortar
Given that price tracking as a form of competitive intelligence has been around for nearly 70-years, we aren’t reinventing the wheel here. However, several tools available to brick and mortar retailers allow them to supercharge their price tracking programs.
After all, retail is all about data and a properly integrated price tracking system not only captures competitive prices from their websites, it combines market intelligence gathered from secret shopping efforts, changes in supplier pricing, and the heaps of data collected from one’s POS system to enable better decisions.
The latter extends beyond the traditional cash register and includes loyalty programs, branded apps, shopping patterns on your website, and even the geo-location tools built of today’s mobile phones. Beyond this, APIs (Application Programming Interfaces) from 3rd party apps offer a cache of data to help retailers make actionable decisions from their price tracking initiatives.
Whilst there is no shortage of data available to retailers, the trick is transforming this data into actionable insights. This requires an approach to collect and analyse data whilst including key stakeholders in the decision-making process.
As such, decisions, even for brick and mortar retailers, are more likely to be based on a scientific approach to pricing than ever before – often relying on a series of experiments to find optimal price levels. The result is a continuous cycle of analysis, adjustments, analysis, and then broader deployment, which in a highly automated POS system can be implemented almost seamlessly.
Thriving in an Omnichannel World
Omnichannel retail might be a buzzword, but it is also a reality. Walk around your retail locations and it is not uncommon to find shoppers using their mobile phones to either check prices or to shop your competitors. This is window shopping on steroids and it points to how the world of retail has been altered forever.
It also presents an opportunity! Retailers don’t need a coherent omnichannel pricing strategy as scientific models confirm price sensitivities vary across shoppers and channels. This means that price tracking is more about applying insights to an individual shopper based on their profile than towards all shoppers.
In doing so, price tracking unlocks the ability to implement dynamic price optimisation strategies based on the needs of individual shoppers rather than kneejerk reactions to an ever-growing list of channels and competitors.
In a fast-changing retail landscape, price tracking is an increasingly important tool to help retailers thrive in an omnichannel world.