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& Retailers continued from page 119
geted and execution becomes more complex, more player involvement is needed in mak- ing pricing decisions, including everyone from procurement to marketing to supply chain. If your pricing capability is still a departmental “island,” then it is time to reevaluate. 3) A data plan for pricing.
Hand in hand with the need for more people to be involved in pricing decisions, you also need more data. To that end, the time has come for a data plan for pric- ing, particularly for promotions that tend to rely on customer data rather than product sales data. A plan also should be de- veloped for the data elements you want and need (versus what you think you have) for more than just the inputs to optimi- zation. Where the data is really lacking is around both pricing decision-making and analytics. When you can’t measure the im- pact of pricing decisions, then you can’t improve the pricing decision you make. 4) Policies and Proce-
dures for price-matching. In 2010, Amazon reported that it had transacted $1 billion in mo- bile sales in 2009. Think about that; these mobile sales were not made by consumers sitting on their couches, and can’t possibly be made up solely of individu- als waiting in doctors’ offi ces or as passengers (hopefully) in cars. Some portion of that $1
120 October 2011
billion came from consumers’ price comparing in the store. It is becoming the anecdote du jour at conferences, and when a store employee gets stumped by a savvy consumer with a smartphone. It’s important to have policies and procedures in place for front-line employees, so they know how to deal with price transparency when it impacts them directly.
account when dealing with bargaining customers. 5) Reevaluate promotional
communications channels. Finally, social media has run headlong into the communi- cations channels that retailers use specifi cally for promotions. With Twitter revamping the ways that retailers can communicate, alongside the tweaks that Face- book always seems to be making to its platform and Googles’s latest announcements around YouTube premium channels, it is more important than ever to reevaluate how we communicate offers to consumers, to rebalance activities across communica- tions channels. Social media like Facebook offer a somewhat stunning return on investment for local retailers to interact with consumers and make early an- nouncements of special offers in the store. Following these steps may not
completely solve the price trans- parency problem, but will go a long way towards generating more customer intimacy, a must for to- day’s independent retailer.
You don’t necessarily have
to price match the lowest on- line price to win the shopper over. Consumers are also sav- vy enough to know when they may have to pay shipping, and in some cases may place signifi - cant value on collecting the item immediately instead of waiting several days for something to be delivered to their home. All of this needs to be taken into
Paula Rosenblum is widely rec-
ognized as one of the top analysts in the retail industry, working as part of the team at Retail Systems Research, LLC. Paula spent over 20 years as a retail technology executive and CIO, and received her MBA in 1991 from Northeast- ern University, with a major in management of High Technology fi rms. To learn more about RSR, visit
www.rsrresearch.com. ■
INDEPENDENTRETAILER
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