Six Secrets to Implementing Successful Price and Product Intelligence
In less than 10 years, the time required for consumers to compare prices for the same product from multiple retailers has gone from hours to literally seconds. No longer do shoppers have to drive from store to store or take valuable time checking websites from various retailers. Everything they need to know about comparing prices for their favorite products can be accomplished with a simple click of a button or scanning a barcode in the store via a mobile shopping app.
We live in a price transparent world, which means the acceptable pricing target range for specific products has narrowed, and retailers need to employ new tactics and strategies to protect and grow margins and stay true to their desired price perception in the market. While simple in concept, gathering and processing online price and product information from e-commerce sites to present timely, actionable insights is deceptively complex and fraught with hidden challenges.
Before implementing a price and product intelligence solution, retailers should consider the following six secrets that will lead to a successful deployment:
1. Clear and communicated price intelligence needs assessment
Retail organizations considering the adoption of a price intelligence solution should have an internal dialogue to ensure alignment on goals, including desired price perception in the market, expected outcomes, scope of categories and items to be included, as well as competitors of interest. To ensure successful execution, retailers need to understand internal objectives, the competitive landscape and enterprise-specific data complexities.
2. Product match accuracy
The majority of credible price intelligence solutions can match exact products with relative accuracy. However, retailers should request a sample of their capabilities and review it in detail. Savvy retailers know that shopper price perception is based not only on pricing gaps on identical products; price perception is also influenced by overall assortment pricing and price gaps on comparable, or like-for-like items. A unique assortment with extensive private label is an increasingly common retail strategy in the age of price transparency, making the ability to accurately match similar or “like” products paramount to the success of a price intelligence system.
3. Price and product intelligence
Price intelligence is a bit of a misnomer, since retailers need to go beyond just price to understand their relative competitive position. Retailers should look for an enterprise-class solution that will deliver a complete view of the competitive landscape, including insights on assortment coverage, private label, shipping and promotions.
4. Proven reliability
“Black Friday” is the first date in the shopping year when most retailers are “in the black”, i.e. turn a profit. This highlights the importance of key shopping dates to a retailer’s financial success. Besides other promotional activity, competitive tactics like dynamic pricing also go into over-drive on these key dates, exponentially increasing the amount of available data to analyze. This makes it critically important for retailers to select a solution that can deliver real-time actionable insights during high-volume peak seasonal periods, without service degradation or outage.
5. Demonstrated commitment to responsiveness and innovation
As with any technology, it is important to find a price intelligence solution that stays ahead of retail trends and adjusts to changing client needs. Retailers like Amazon are constantly tweaking and refining their online algorithms and inventing new means to block systematic pricing captures. E-commerce adoption is accelerating as more categories go online and shopping behaviors change, with the associated impact of ever increasing price transparency. This makes surviving and thriving in a price transparent world a moving target with new opportunities and threats emerging daily.
6 Integrated approach
Pricing intelligence solutions need to be adaptive and able to work with price optimization tools, re-pricing engines and other enterprise technologies. The reality is that without integration to other critical back office systems, such solutions become stand-alone silos that duplicate tasks, fail to leverage existing technology investments, and ultimately deliver sub-optimal pricing, promotion and assortment decisions. With plug-and-play compatibility between systems, retailers can get the best of both worlds. Each system is specialized and effective in what it does with the seamless transfer of information between systems, enabling retailers to take the most effective action.
We live in a price transparent world, which means the acceptable pricing target range for specific products has narrowed, and retailers need to employ new tactics and strategies to protect and grow margins and stay true to their desired price perception in the market. While simple in concept, gathering and processing online price and product information from e-commerce sites to present timely, actionable insights is deceptively complex and fraught with hidden challenges.
Before implementing a price and product intelligence solution, retailers should consider the following six secrets that will lead to a successful deployment:
1. Clear and communicated price intelligence needs assessment
Retail organizations considering the adoption of a price intelligence solution should have an internal dialogue to ensure alignment on goals, including desired price perception in the market, expected outcomes, scope of categories and items to be included, as well as competitors of interest. To ensure successful execution, retailers need to understand internal objectives, the competitive landscape and enterprise-specific data complexities.
2. Product match accuracy
The majority of credible price intelligence solutions can match exact products with relative accuracy. However, retailers should request a sample of their capabilities and review it in detail. Savvy retailers know that shopper price perception is based not only on pricing gaps on identical products; price perception is also influenced by overall assortment pricing and price gaps on comparable, or like-for-like items. A unique assortment with extensive private label is an increasingly common retail strategy in the age of price transparency, making the ability to accurately match similar or “like” products paramount to the success of a price intelligence system.
3. Price and product intelligence
Price intelligence is a bit of a misnomer, since retailers need to go beyond just price to understand their relative competitive position. Retailers should look for an enterprise-class solution that will deliver a complete view of the competitive landscape, including insights on assortment coverage, private label, shipping and promotions.
4. Proven reliability
“Black Friday” is the first date in the shopping year when most retailers are “in the black”, i.e. turn a profit. This highlights the importance of key shopping dates to a retailer’s financial success. Besides other promotional activity, competitive tactics like dynamic pricing also go into over-drive on these key dates, exponentially increasing the amount of available data to analyze. This makes it critically important for retailers to select a solution that can deliver real-time actionable insights during high-volume peak seasonal periods, without service degradation or outage.
5. Demonstrated commitment to responsiveness and innovation
As with any technology, it is important to find a price intelligence solution that stays ahead of retail trends and adjusts to changing client needs. Retailers like Amazon are constantly tweaking and refining their online algorithms and inventing new means to block systematic pricing captures. E-commerce adoption is accelerating as more categories go online and shopping behaviors change, with the associated impact of ever increasing price transparency. This makes surviving and thriving in a price transparent world a moving target with new opportunities and threats emerging daily.
6 Integrated approach
Pricing intelligence solutions need to be adaptive and able to work with price optimization tools, re-pricing engines and other enterprise technologies. The reality is that without integration to other critical back office systems, such solutions become stand-alone silos that duplicate tasks, fail to leverage existing technology investments, and ultimately deliver sub-optimal pricing, promotion and assortment decisions. With plug-and-play compatibility between systems, retailers can get the best of both worlds. Each system is specialized and effective in what it does with the seamless transfer of information between systems, enabling retailers to take the most effective action.