Retailers Need To Do Price Optimization, Brick-and-Mortar Ones Too!
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Black Friday came and gone and with it our innocence about consumerism. Let’s face it, shopping is engulfing every other aspect of our lives, except maybe eating. And we’re not doing that great there either – more than two-thirds (68.8 percent) of adults in the U.S. are considered to be overweight or obese according to to the Department of Health and Human Services.
This can also explain the fact that in 2015, Black Friday online sales suppressed those of brick-and-mortar. And again this year, store sales fell another 5% and online sales, mobile included, hit the $3B mark for the first time.
That’s a well-known fact, right? More folks are doing their shopping online rather than bothering themselves with getting to an actual, physical store. And the trend is definitely about to continue. Expect the headlines after Black Friday 2017 to read “Another 10% Drop for Retail Stores”.
The Rules We Were Based On Are Changing
Still, it’s way too soon to close the lid on the brick-and-mortar retail world. Evidence to that would be Amazon opening physical stores after it established itself as the go-to shopping site for Americans. Why would they do that? Because, for now, we still live in the physical world, we still move in-person from point A to point B and being curious creatures with eyes in our head, display windows still make us stop in our tracks. We also love the touching stuff.
The truly interesting trend we are witnessing is how the online world is shaping the physical one. Not too long ago it was the complete opposite. The first graphic interface websites tried to copy the look and feel of newspapers and magazines; remember that trend of websites that you had to “flip” the pages?
Now, more and more magazines look like a website printed on paper.
Optimizing Price Comparison For The Online World
In retail, the situation is a bit more complex. Let’s take a common use case to illustrate the unique challenges now facing brick and mortar retailers.
In the past, when we wanted to shop we would go to the mall, or main street, or downtown, and visit a bunch of stores to compare selection and prices. We had our favorite stores that were conveniently located and carried merchandize to our taste. And we were loyal to them. These were different times.
First, loyalty is pretty much gone. The internet has leveled the playing field, due to immense selection and the irrelevance of location; say hi to Free Shipping. Second, price comparison has evolved to the level of sport. Nothing is simpler than compare prices online, there are numerous sites and apps dedicated exactly for it.
Now just because the act of comparing is done online doesn’t exclude brick-and-mortar retailers from the burden of competitively pricing their merchandize. And more than that – physical stores now need to be competitive not only against other physical stores but also online. Because where do shoppers prices? Online.
Time To Get Into Predictive and Dynamic Pricing
What’s the takeaway from all this? Except for utter bafflement, what can retailers do? Well, they need to optimize their pricing for the online even if they are operating offline. That’s a bummer of a conclusion, no doubt about that, but like everything else in life, there’s an app for that.
More of software than an app. Pricing optimization software are a necessity for retailers. What this software do is keep you informed of the competitive landscape of any product you assign them to by collecting pricing information and being able to dynamically adjust the pricing of the product.
And that’s not all. There is more advanced pricing optimization software that provides predictive analytics and recommends you the optimal price for your product based on the pricing rules you set, aligned with your business goals. Check the price tracking tool by UpstreamCommerce as an excellent example of such software.
Stay Competitive, Stay Dynamic
It’s the same game that is played all over the internet – how to turn big data into actionable insights. It involves understanding your audience, and your competition, better than ever. We’ve definitely got the tools for it, and retailers must learn how to use them. Otherwise, they would find themselves losing the competitive intelligence war.
The same way the brick-and-mortar world relied on walk-ins and high-traffic streets, the online world depends on eTraffic sent from search engines. If the brick-and-mortar world had word-to-mouth and just good old reputation, the online sphere relies on SEO, the ability to control and increase your online presence; SEO agencies, like eTraffic that provides SEO for new websites as well as established ones, have become an important factor in online retailers’ success.
What’s remarkable about this is, as mentioned before, how brick-and-mortar retailers are dragged into the tussle, whether they want or not. The tables have definitely turned – it is the online world that is now setting the pace for the other one, the one that is still spinning around itself, and around the sun. This online world, on the other hand, is priding itself on no moving parts.
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