bringing online price intelligence in-store · in a price transparent world, pricing is a...

Bringing Online Price Intelligence

In-Store

The Omnichannel Story

In a price transparent world, pricing is a cornerstone to retail success in any channel.

Online competitive price intelligence isn’t just for retailers. Your customers are comparing your store prices to online prices instantly at home and even while in your store.

The bottom line? Whether you have a strong e-commerce presence or only operate brick-and-mortar stores, online competitor prices are now the primary points of comparison that

shoppers use to decide if they will buy from you.

Increasingly, traditional retailers are embracing that “showrooming” and “webrooming” are the new “shopping”.

The good news is, getting a clear picture of how your price strategy compares to competitors and acting on this information is now easier than ever with the availability of Big Data analytics for retail, including online competitive

price intelligence.

This document is designed to help retailers who operate brick-and-mortar stores survive and thrive in this new world of price transparency by leveraging online competitive monitoring.

© 2014, 360pi Corporation. All Rights Reserved. | [email protected] | 1.855.360.0075 | 360pi.com

Bringing online price intelligence in-store


1. Get Clear Visibility Into The Competitive Landscape

Develop an objective, real-time understanding of how you are positioned in the market.

Are you over-priced on video games? Are you under-priced on printers? Your customers know the answers to these questions because they have compared prices in your competitors’ stores and, more often, online. Indeed,

they may be purchasing the product on a competitor’s site while standing in your store aisle.

In order to limit lost sales, keep customers happy, promote your brand, and ensure you are executing accurately on your pricing strategy, the first step is to have clear visibility into the competitive pricing landscape. No matter what your price strategy is, it has to be in line with the other options available to your customer when purchasing

this, or a similar, product.


Real-World Application

One store-based chain that recognized the importance of online competitive price intelligence early on is Ace Hardware, a franchise operator that is also a 360pi customer. Building on its excellent customer service supported by regional franchisees, the instant gratification that the in-store experience provides, and a strong private label portfolio, Ace Corporate decided to address

competitive pricing head-on and implemented our award-winning online competitive intelligence solution.

Not all Ace Hardware products are available for purchase online and prices vary across franchisees and zones/regions. However, franchisees now know the exact position of each of their in-store and online prices in the competitive market every day, and are

able to drill down to opportunities and threats that require immediate action based on competitor price moves.



The good news is, getting a clear picture of how your price strategy compares to competitors and acting on this information is now easier than ever with the availability of Big Data analytics for retail, including online competitive price intelligence.

2. Act On Opportunities And Threats

Once you’ve implemented a sophisticated competitive price intelligence system and started monitoring how your prices and assortment compare to competitors, you will immediately begin to see competitive threats and

opportunities. Now you can:

Address Immediate IssuesFigure out which of your individual SKUs are losing sales due to pricing and adjust pricing to improve turns.

Manage MarkdownsBy monitoring your competitiors’ regular and markdown pricing on individual SKUs, as well as entire categories,

you can set your prices “right” and maximize sell-throughs.

Increase MarginsNobody wins in a “race to the bottom”. Find underpriced products where you are leaving money on the table and

increase margins.




Ensure Zone-based Pricing SuccessMore and more retailers are implementing zone pricing on their websites and 360pi often observes significant differences in price from one zone to another. This means that it’s crucial to compare your in-store prices with

those of competitors in the same zone. As such, it’s essential to make sure your online competitive intelligence has zone-based information to accurately track how you compare in your region.

Price-Match RightIf you offer price-matching guarantees, it becomes essential to be able to quickly verify competitor prices and

availability at the time a customer claims the price match.

Improve Accuracy Of Promotion Sales ForecastsDraw conclusions from historical trends in price competitiveness and understand how competitors reacted to

your price moves.

Be Compliant With Your Intended Pricing Strategy And Brand ImageYou have decided on a pricing strategy and brand image, but do your prices support it? Make sure you compare

the way you want to compare.


You have decided on a pricing strategy and brand image, but do your prices support it? Make sure you compare the way you want to compare.


3. Plug Into Your Existing Systems

To get the most out of competitive intelligence, plug in real-time online competitive price data into your existing systems.

Price Optimization Engines

Your price-setting engine takes into account vast amounts of your internal data to recommend optimized prices, but does it also consider external sources of competitive pricing information? The effectiveness and ROI of your price optimization engine will be dramatically enhanced by including competitive data as a key input. In fact, in the absence of competitive data, there is a high risk of setting prices that are higher than where you intended to

be with respect to competitors, or that are unnecessarily lower than your lowest-priced competitors.



In-store And Online Price Intelligence

Traditionally, retailers have collected competitive price intelligence by sending employees into competitor stores or hiring services which send agents into competitor stores to gather competitive price data on their behalf.

While in-store competitive data remains an important input in setting in-store prices, as discussed above, more and more shoppers are using online prices as their primary point of comparison. Furthermore, competitors’ in-

store prices can generally only be monitored on, at best, a weekly basis, and generally only cover a small subset of a competitor’s SKUs, providing a relatively small (though still important) part of the picture.

Fortunately, online prices (such as Amazon’s prices) are easier and less costly to monitor, and a competitive price intelligence system can monitor competitive prices on all of your SKUs that are carried by all major

competitors, every day.



Dynamic Price Changes

A common question among brick-and-mortar stores is around how to respond to online prices in-store when they can only change shelf prices a few times per week, or possibly even less frequently. While this limitation can be a challenge, it does make it doubly important to take online competitor prices into account when setting in-store

prices, making sure that the prices on your shelf reflect most recent competitor prices changes.

360pi’s data also show that even Amazon, known for its price dynamism, only makes daily price changes on less than 10% of their assortment, with over a 30% changing prices every two weeks or less. This means that most of your shelf prices are likely to remain “fresh” for some time after they are posted, and do not need to be updated

daily.

Electronic Shelf Labeling (ESL) is also being evaluated by many retailers, since it allows for far more frequent, more cost-effective price changes. 360pi is aware of some retailers who are even considering using ESL to

proactively display competitors’ prices.

Online Marketing Campaigns

With online marketing campaigns, such as Google Product Listings Ads (PLAs), becoming more centered on price, it is important to take this real-time price transparency into consideration. An online competitive price

intelligence solution that is integrated with your marketing engine can recommend when to run a promotion and when to hold off - if the competitor price is lower, you may want to save that budget for a different campaign.

Also, competitive visibility ensures that your promotional prices are attractive without being underpriced.


Checklist

When choosing a competitive intelligence monitoring solution, remember to ask about:

Contact us for more information on choosing the solution that’s right for you.



The effectiveness and ROI of your price optimization engine will be dramatically enhanced by including competitive data as a key input.


4. Get Everybody On Board

From merchandisers to marketers, competitive price intelligence affects everyone in your organization.

Stores / Store OperationsWith the customer in the store, you have already won part of the battle. Empower your store associates to

compare competitive prices/availability instantly, check up on price matching claims, fulfill online orders, and reinforce the brand message.

Customers have access to competitive information instantly on their smartphones and your store associates deserve to have the same knowledge as your customers. For example, with 360pi’s mobile product, 360agent,

sales associates can instantly look up competitor prices, shipping charges, and product availability for any given SKU on any smartphone, tablet, or other web-enabled device, thus precluding showrooming and taking the

initiative in the sales conversation.

Over time, some products will offer greater margin opportunities if sold online versus in-store and vice versa. Make sure your assortment decisions are in line with your omnichannel strategy to optimize margins.

Buyer/MerchandiserSometimes incorrect pricing leads to poor assortment decisions. The full objective picture of how your pricing and assortment compare to competitors will help you optimize merchandising. Find gaps in your assortment

and opportunities to increase margins and optimize market share.



Pricing/AnalyticsUse real-time data to generate the best possible prices at any time. Prepare accurate pricing reports and draw

conclusions about the effects of changes to regular and promotional prices on sales.

C-Level ExecutiveDevelop and execute a winning pricing strategy based on an objective, real-time evaluation of the competitive landscape. Competitive pricing intelligence helps you determine the high-level trend for how price competitive

you are in the market and how compliant you are with your own pricing strategy.

MarketingIdentify and track your competitive set. Promote and reinforce your desired brand image through your pricing

strategy and see how your brand really compares to the competition. Develop price-matching and loyalty programs based on competitive insights. With real-time and historical data on prices, you can see who is

matching your prices and get visibility into promotional pricing strategies of all your competitors.


With real-time and historical data on prices, you can see who is matching your prices and get visibility into promotional pricing strategies of all your competitors.


5. Omnichannel And Customer Experience

Even if you’re not omnichannel, your customers are. What is your omnichannel strategy?

In 2014, most major retailers are on a quest to improve customer experience. A large part of this is managing customer expectations regarding price - using loyalty programs and personalized promotions to pull in more

customers across channels while still maximizing return per channel.

A recent Retail Systems Research (RSR) report, entitled “The Pricing Paradox: Benchmark Report 2014”, shows the impact of channel proliferation on the different pricing strategies being employed by retailer winners

and laggards this year:


Source: RSR Research


Essentially, retailers need to ask themselves:

What is the optimal product and optimal price at any given time for each channel?

Channel-Specific Pricing And AssortmentOne of the more common ways to handle multiple retail channels is to determine which product assortment and

which prices will be optimal in each channel. Analyze your competitors’ online and in-store assortment and prices to find and address opportunities and threats.

Zone-Based Pricing In the OmnichannelAn extension of channel-specific pricing is regional, or zone-based pricing. Zone-based competitive intelligence

becomes key in this scenario because you want to make sure you are pricing according to the competitive prices in the zone you care about, not an average of all zones, and not an arbitrary zone. This way, you can identify and

seize regional pricing opportunities to increase margins and maintain your brand image in each zone.

Channel-specific PromotionsPromotions that are available only online, or only in the store, are another common way of optimizing return from the different available channels. Competitive intelligence touches every aspect of promotional planning, starting from identifying opportunities. Once your promotion is launched, real-time competitive data helps track pricing moves that other retailers make in response to yours - and make sure your pricing still compares the way you

planned.



Omnichannel LoyaltyProactively offering competitor price information is becoming a trend and goes a long way to build customer

trust and loyalty. For example, the WalMart Savings Catcher program encourages shoppers to cross channels - customers register in-store receipts online and WalMart looks up the competitor prices on their items. If the

competitor price is lower, the customer gets a credit in that amount to make online or in-store purchases. Embracing price transparency and omnichannel experience of the customer, meeting shoppers where and when

they want to buy, and migrating customers when categories shift online - all these will contribute to customer loyalty and satisfaction in the new shopping world.


Zone-based competitive intelligence becomes key in this scenario because you want to make sure you are pricing according to the competitive prices in the zone you care about, not an average of all zones, and not an arbitrary zone.


To Summarize... In a price transparent world, competitive intelligence is omnichannel, as is the customer.


To find out more about what 360pi can offer for your in-store strategy, visit 360pi.com.


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Become a retail pricing expert. Discover best practices in pricing and competitive monitoring from 360pi price intelligence experts and industry thought leaders.

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Direct: 613.562.2525 Ext 1Toll Free: 1.855.360.0075 Ext 1Email: [email protected]


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Our Clients

Broad Category Coverage• AutomotiveParts&Tires• Books/Music/Video• ConsumerElectronics• HomeImprovement• MassMerchandise• OfficeSupplies• Shoes• SportingGoods• Toys

360piisthetrustedproviderofcompetitivemonitoringtomanyofNorthAmerica’slargestretailers.OurclientsincludeAceHardware,BestBuyCanada,Build.com,Crutchfield,Overstock,andSearsCanada.

About 360pi 360pi helps top retailers compete and win in an increasingly price transparent environment. 360pi actively monitors millions of products from hundreds of retailer websites and delivers price intelligence for exact and similar matched products with unprecedented accuracy. 360pi’s customer base of “brick & mortar”, e-commerce, and multichannel retailers accounts for over $US100 billion in annual retail sales and includes Ace Hardware, Build.com, Overstock.com, and RIS Fusion award-winner Best Buy Canada. 360pi clients gain real-time visibility into the market and full awareness of the competitive pricing landscape to “right price” to consumers. Ultimately, 360pi’s customers make smarter pricing decisions that drive increased conversions, revenues, margins and customer loyalty.

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