Pricing is under a microscope as we head into the holiday season. Price monitoring and price matching are being keenly watched. Will retailers better navigate these waters?
Walmart, for one, has put pricing front and center. The chain has been going head to head in pitched price battles with Target (NYSE:TGT) in Canada as that retailer struggles to improve its price position. Target entered that market with 120 stores in 2013, and was soundly criticized for having higher prices than not just its competition, but than Target's U.S. stores, locations that are easily reached by many Canadian shoppers living near the border.
Target has since adjusted pricing and in a recent survey bested its competition, a move that is critical for the retailer to right its international efforts.
But holiday pricing is a moving target. Sure, Black Friday ads are already set (and leaked) but there are hundreds of thousands of SKUs that fluctuate daily or even hourly.
In fact, according to 360pi, Amazon (NASDAQ:AMZN) pricing on roughly 15 percent of its Halloween costumes changed every one to two days in the weeks leading up to the holiday. Specialty retailers selling the same items on Amazon's marketplace changed prices far less frequently and managed to offer slightly lower prices than Amazon.
Amazon has been accused of changing prices quickly to best its marketplace sellers, and it's critical for competitors — both online and brick and mortar — to do the same.
Walmart (NYSE:WMT) already has a price-matching program for local, in-store customers, but there is an ongoing internal discussion among executives about whether to make the feature available online, reported the Wall Street Journal, bringing it that much closer to closing the gap between the channels, price-wise.
Walmart's Savings Catcher ereceipt is garnering a lot of attention as a tool that helps shoppers automatically receive the lowest advertised price. Walmart is using a proprietary platform developed by its @WalmartLabs division in California, but managed analytics providers are available to help other retailers sort through the pricing noise.
LG recently announced it would partner with Ugam for pricing intelligence, monitoring and operational support. The platform will help LG monitor channel performance, detect pricing irregularities, identify authorized and unauthorized activity, and act upon the information.
The combination of big data with predictive analytics uncovers channel insights and recommends actions to enforce pricing policy, prevent revenue loss from unauthorized activity and promote fair competition among brand affiliates and dealer channels, according to Ugam. The program monitors prices from competitive websites and marketplaces to make timely adjustments.
"We seek to understand prices that can change by the minute – from list prices to sale prices to in-cart prices – and deliver a consistent, positive experience to our customers," said Stephen Coppola, director of channel marketing, home entertainment, LG Electronics USA. "We turned to Ugam because they're offering large-scale, real-time price monitoring combined with analytics services that help us understand the data. With Ugam's support, our channel partners will be confident that our pricing policy is fostering fair competition in the marketplace."
Nimble price adjustment and the ability to match online and in-store advertised prices are a cornerstone of omnichannel operations. This holiday season, and its many tests and new program initiatives, should help further these efforts.
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