Achieving Omni-Channel Success with Price Intelligence
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Retailers face increasing challenges related to pricing including high consumer price sensitivity, aggressive competitive pricing, and the need to maintain brand image. Many retailers still believe they can win on price alone, though top performers focus more on brand protection. Gathering competitive price data remains a challenge, with over half of respondents still relying on manual processes. Emerging technologies that provide automated competitive price intelligence are helping address this challenge and better enable retailers to implement effective pricing strategies across all sales channels in today's omni-channel environment.
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Achieving Omni-Channel Success with Price Intelligence
- 1. TOUGH LOVE: An In Depth Look at Retail Pricing Prac=ces #360pricing Sponsored by
- 2. #360pricing Type ques=on here Welcome Webinar A8endees
- 3. #360pricing Follow This Webinar On Twi8er #360pricing
- 4. #360pricing About Retail TouchPoints ü Launched in 2007 ü Over 26,000 subscribers ü To provide executives with relevant, insightful content across a variety of digital medium Free subscription to our weekly newsletter: WWW.RETAILTOUCHPOINTS.COM/SIGNUP
- 5. #360pricing Panelists Nikki Baird Managing Partner RSR Research Debbie Hauss Editor-in-Chief Retail TouchPoints MODERATOR Jenn Markey VP, Marketing 360pi
- 6. Tough Love: An In Depth Look at Retailers’ Pricing Practices: Benchmark 2013 NIKKI BAIRD MANAGING PARTNER MAY 2013
- 7. What Is RSR? • Market Intelligence, focused on retail • Context: the business challenges & opportunities that drive technology investments • Pragmatic insights • Powered by extensive retail experience • Fueled by a deep bed of research data • We help retailers keep their IT strategies aligned with corporate objectives • We help solution providers align their products and messages with retailers’ needs 7 Tough Love: An In Depth View at Retail Pricing Practices
- 8. Our BOOT Methodology 8 They sell more “stuff” but… they also think and act differently than their competitors. Retail Winners: Year-over-year comparable store sales outperform inflation. Business Challenges Opportunities Organizational Inhibitors Technology Enablers Tough Love: An In Depth View at Retail Pricing Practices
- 9. Respondent Profiles (Pricing 2013) Responses received from 134 respondents, January-April 2013 • Revenue • 37% Tier 4 (Less than $50m/year) • 19% Tier 3 ($51m - $249m/year) • 11% Tier 2 ($250m-$999m/year • 15% Lower Tier 1 ($1b - $5b/year) • 18% Upper Tier 1 (More than $5b/year) • Performance • 20% Below average • 45% Average • 35% Above average • HQ • 66% North America • 16% Europe • 2% UK • 9% Asia Pacific • 2% Latin America • 5% Middle East/Africa 9 Tough Love: An In Depth View at Retail Pricing Practices
- 10. Respondent Profiles (cont.) • Retail Presence • 94% North America • 26% Europe • 15% UK • 20% Asia Pacific • 15% Latin America • 22% Middle East/Africa • Products Sold • 31% Fashion, Short Lifecycle or Seasonal • 27% Durable Goods or Consumer Electronics • 27% Basics or Replenishment Goods • 15% Perishables 10 Tough Love: An In Depth View at Retail Pricing Practices
- 11. The Top 5 Things RSR Learned About Price Intelligence 1. Price sensitivity of consumers continues to drive retailers’ priorities when it comes to pricing practices 2. Competitive response is still fierce 3. A large number of retailers continue to believe they can win on price alone 4. Retailers are starting to figure out showrooming – the best response? To “be competitive” 5. Lack of clean data is inhibiting retailers’ pricing capabilities Bonus Learning: As pricing matures, retailers intend to more deeply integrate all kinds of data elements into price decisions 11 Tough Love: An In Depth View at Retail Pricing Practices
- 12. Price Sensitivity & Aggressiveness 18% 9% 27% 22% 47% 42% 51% 67% 13% 21% 25% 25% 33% 34% 40% 41% 57% Respond to segment blurring (competition coming from unexpected places) Need to provide more localized pricing Need to provide consistency in price across channels Increased promotional intensity of competitors Increased price transparency – the impact of comparative price shopping Need to protect our brand’s price image Need to get better return on our inventory investment through pricing Increased pricing aggressiveness from competitors Increased price sensitivity of consumers TopThree (3) Strategic Pricing Business Challenges 2013 2012 N/A 12 Source: RSR Research, April 2013Tough Love: An In Depth View at Retail Pricing Practices
- 13. Winners Seek Brand Protection Laggards Look Over their Shoulders 13 28% 39% 56% 11% 17% 13% 39% 45% 29% 29% 6% 22% 25% 28% 47% Respond to segment blurring (competition coming from unexpected places) Increased price transparency – the impact of comparative price shopping Increased pricing aggressiveness from competitors Need to provide consistency in price across channels Need to protect our brand’s price image Business Challenges - Differing by Performance Retail Winners Average Performers Laggards Source: RSR Research, April 2013Tough Love: An In Depth View at Retail Pricing Practices
- 14. Competitive Vulnerability Tops the Chart in all Categories 14 64% 44% 67% 53% 24% 56% 38% 40% 48% 24% 29% 40% Fashion/Seasonal Basics/Replenishment Durable Goods & Consumer Electronics Perishable goods TopThree (3) Difference by Sub-vertical Increased price sensitivity of consumers Increased pricing aggressiveness from competitors Need to protect our brand’s price image Source: RSR Research, April 2013 When asked about their position on commoditization and margin erosion, 55% report “We have to operate within an extremely price competitive environment” – far more than any other issue – including the impact of price transparency. Tough Love: An In Depth View at Retail Pricing Practices
- 15. Laggards Hope to Lead with Price 15 65% 36% 28% 59% 56% 66% Laggards Average Winners Top-3 Pricing Opportunities: The Winner's Perspective Improve top-line sales Improve margins Source: RSR Research, April 2013Tough Love: An In Depth View at Retail Pricing Practices
- 16. Figuring Out Showrooming As more and more retailers encounter showrooming, their confidence in what to do about it seems to increase. Biggest differences: • Laggards drive the "Ignore it" category: 18% vs. 9% of Winners. Laggards are also more likely to price match - 24% vs. 16% of Winners. • Average performers are most likely to be competitive - 42% vs. 38% of Winners and 29% of laggards. • Winners are most likely to say they haven't seen any showrooming yet - 34% vs. 18% of average performers and 29% of laggards. • Average performers appear to be getting squeezed - they aren’t necessarily positioning themselves against laggards as low price competitors, but they don't necessarily have the service or message elements that help them justify not price matching. 16 9% 11% 43% 26% 7% 12% 39% 39% 14% 17% 27% 38% Ignore it Price match We haven't seen it yet Be "competitive" Mobile Price Comparison Policies 2011 2012 2013 Source: RSR Research, April 2013Tough Love: An In Depth View at Retail Pricing Practices
- 17. What’s Getting in the Way? 17 29% 31% 31% 34% 34% 40% 42% 42% The possibility of negative customer reaction to changes in our pricing strategy Resistance to change from Merchandising We can’t execute at the level of granularity that pricing solutions provide Lack of coordination with Marketing Channel organizational structure makes it difficult to coordinate pricing strategies across channels Lack of the right skill sets Resistance to change from Stores or other channels Lack of clean price, competitor and purchase data TopThree (3) Organizational Barriers Impacting Ability to Implement More Effective Pricing Practices Source: RSR Research, April 2013 Tough Love: An In Depth View at Retail Pricing Practices
- 18. Pricing is No Longer An Island 18 15% 21% 26% 33% 23% 28% 41% 44% 33% 14% 19% 24% 28% 32% 35% 42% 44% 51% Best practices for managing channel conflict of prices Line of business leaders to help change our business processes Pilot programs in specific stores or regions Better communication and education of resistant parties or organizations Better training to improve pricing skill sets Tailor a technology solution to my business process and needs Business process analysis for pricing process improvement Build up progressively more sophisticated pricing capabilities over time Improved integration technology tools TopThree (3) Ways to OvercomeThese Barriers 2013 2012 Source: RSR Research, April 2013Tough Love: An In Depth View at Retail Pricing Practices
- 19. Nikki Baird: nbaird@rsrresearch.com 1-303-683-6613 Denver, CO, USA 19 Thank You! www.rsrresearch.com Tough Love: An In Depth View at Retail Pricing Practices
- 20. <#> PLACEHOLDER" Polling Question" Tough Love: An In Depth View at Retail Pricing Practices
- 21. <#> Achieving Omni-Channel Success with Price Intelligence " Jenn Markey VP, Marketing 360pi"
- 22. <#> Pricing Enters the C-Suite" Tough Love: An In Depth Look at Retail Pricing Practices" 19# Double dip recession Amazon Technology disruption Omni-Channel#
- 23. <#> Price needs to reflect brand" Tough Love: An In Depth View at Retail Pricing Practices" Everyday Low Prices Premium Pricing Price + Customer Experience = Brand Brand consistency = Omni-‐Channel 20#
- 24. <#> Consumer Electronics – Hit Hardest by Showrooming" Source: Placed - Aisle to Amazon Study Tough Love: An In Depth View at Retail Pricing Practices" 21#
- 25. <#> Consumer Electronics: Price Sensitivity & Volatility" Product: Samsung UN55EH6000 55-‐Inch LED HDTV Timeline: Q4, 2012 (Oct 1-‐Dec 31) Compe=tors: • Best Buy Canada • Best Buy US • Future Shop • Amazon US • Amazon US Marketplace • Sears Canada • Sears US • Frys Electronics 22# BlackFriday Full Competitive Pricing# ReportAvailable at:# www.360pi.com#
- 26. <#> Dealing with Price Sensitivity & Volatility" Tough Love: An In Depth Look at Retail Pricing Practices" Need accurate real ]me view into compe]tors’ pricing 23#
- 27. <#> Easier said than done" Tough Love: An In Depth View at Retail Pricing Practices" 24#
- 28. <#> Manual efforts prone to error & delay" 58% 52% 54% 36% 13% 0% 4% 7% Fashion/Seasonal Basics/Replenishment Durable Goods & Consumer Electronics Perishable goods Gathering Competitive Price Intelligence Data Not currently using it It's a manual process Tough Love: An In Depth View at Retail Pricing Practices" Good candidates for 360pi’s Automated Price Intelligence 25#
- 29. <#> How do we get it?" Tough Love: An In Depth View at Retail Pricing Practices" 26#
- 30. 360pi Retailer Advantage" Product Price Purchase Tough Love: An In Depth View at Retail Pricing Practices 360comparables 360price 360mobile 27#
- 31. <#> Multi-Faceted View of Price" Tough Love: An In Depth View at Retail Pricing Practices" 28#
- 32. <#> Don’t get left behind" Tough Love: An In Depth View at Retail Pricing Practices 29#
- 33. <#> Next Steps" Best practices and thought leadership content to help you on your price intelligence journey. 360pi.com/resources/discovery-center " Modern Retail Pricing is our blog and covers new trends and insights into retail pricing. Subscribe today! blog.360pi.com" See our product in-action and discover what it can do for your business. Request a free demo! 360pi.com/free-demo" Tough Love: An In Depth View at Retail Pricing Practices" 30#
- 34. <#> Contact Me" Jenn Markey VP, Marke]ng 360pi j.markey@360pi.com 1.855.360.0075 (toll-‐free) @360_pi Tough Love: An In Depth View at Retail Pricing Practices" 31#
- 35. #360pricing Type ques=on here Q&A // Submit Your Ques]ons
- 36. #360pricing Q&A // Panelists Nikki Baird Managing Partner RSR Research Debbie Hauss Editor-in-Chief Retail TouchPoints MODERATOR Jenn Markey VP, Marketing 360pi
- 37. #360pricing Thank you for a8ending! Download this presenta]on at: hKp://rtou.ch/360pricingweb