The New Era of Pricing is Rapidly Approaching
As retail continues to evolve and re-invent itself, old practices are constantly being replaced by more efficient and cost-effective methods. To keep up with the times, stores are striving to enact new cost-cutting technology, offer a great customer experience and beat competitors’ prices. Amazon’s acquisition of Whole Foods will push grocery retailers to create more compelling, customer-focused experiences, but ongoing success will still be achieved by offering shoppers competitive and consistent prices and promotions across in-store and online channels. As such, in the efforts to deliver these advanced pricing strategies, there is a fast-approaching and inevitable “changing of the guard” when it comes to in-store retail pricing.
The Analog Pricing Era is Over
It’s shocking that in our digital age, and in such a price sensitive market, most prices and offers are still displayed on paper labels. Paper labels often show the wrong prices and have to be manually replaced and updated by staff when price and promotions change. This time-consuming, costly process is a huge burden for retailers, and, it is often impossible to keep up with what labels need to be changed – and when.
To ensure that price and promotions are accurate and consistent across all channels – in-store, online and mobile – stores must centrally manage changes in real time. To do this, retailers must become more digital. I believe that over the next five years, most major retail outlets will move to this new system of electronic shelf labels. The truth is, paper labels are a relic and cannot come close to giving retailers the ability to drive their in-store pricing and promotions with speed, agility and consistency.
Embracing the future with dynamic pricing
With electronic shelf labels, retailers can change prices in seconds, allowing them to utilize dynamic pricing in stores. Dynamic pricing uses macro trends and generic sales data in real-time to inform and initiate price changes. As store retailers continue to compete with agile online merchants who change millions of prices a day, dynamic pricing is essential to improve the bottom line and customer experiences.
With some grocery retailers selling 50% of items on promotions, ensuring prices align when they come on or off of promotion is a demanding, but important task. The combination of dynamic pricing and electronic shelf labels achieves this goal. Assuring retailers and customers that prices are accurate – all the time, and on every shelf.
Some of the many benefits of moving past analog pricing include:
- Agile Pricing: Dynamic pricing makes it easier to price by events, time of day and store location, clear overhanging stock and reduce waste. Instantly matching competitor prices assures that customers are being offered the best deal available.
- Reducing Waste and protect margins: Nearly a third of the food in the U.S. is thrown away. By having the freedom to remotely change prices on any shelf in seconds, retailers can graduate pricing based on sales velocity, inventory levels and expiration dates to ensure they reduce waste by the end of the business day
- Trust and integrity: Delivering accurate information and pricing builds customer’s confidence that they can budget and plan their shop reliably and leads to a more trusting relationship between the retailer and the consumer.
This “new era” of pricing doesn’t only speed up the process of price and promotion changes, but also gives employees time to assist more customers, push sales and create a better shopping experience. This efficiency, lower costs and improved attention to customers is essential to survival in today’s retail landscape.
As every facet of retail is disrupted by the likes of Amazon, retailers must take a hard look at how they can move forward into the next chapter of shopping. This requires implementing new technology, along with taking the necessary steps to offer a streamlined and customer-centric shopping experience. With dynamic pricing at the shelf edge, stores more easily embrace the next generation of pricing. Soon enough, the decision to move past the old way of in-store pricing will be table stakes for competing and winning in today’s retail environment. The time to evolve the shelf edge is now.
-Paul Milner, Marketing Director, Displaydata