For UK retailers, pricing is more important than
ever before. Consumers can now research and
compare products easily so, when picking which
retailer to shop with, they will often look at price
ahead of place, people and even product.
To stand out, many retailers mistakenly conflate
offering consumers the “best” prices with simply
offering the lowest compared to their competition
– a damaging false economy, which can greatly
diminish margins and overall proftability.
More concerningly, some retailers underestimate
the importance of price and simply do not monitor
prices at all. Retail brands that ignore such a key
competitive advantage risk of falling out of touch
with a rapidly-shifting market.
Of course, constant price monitoring and
modifcation can be an onerous task. After
all, the average retailer now needs to consider
millions of pricing decisions daily to keep up,
and many retailers simply do not have the time
to monitor pricing as much as they should.
Thus, we often see pricing strategies that are
ineffective, not ft-for-purpose or even absent
altogether.
We need to think on how to price more intelligently;
not about taking part in a damaging price war –
which merely takes into account external factors
such as competitor pricing - but rather about
taking a broader view of the market as a whole.
This means considering a range of factors
both external and internal, such as ongoing
commercial strategy, inventory levels and stock
purchase prices.
It’s high time we paid more attention to the cost
of unintelligent pricing.
It’s time for a change.
Foreword from
Sander Roose
Founder and CEOOmnia Retail is led by founder and CEO Sander
Roose, who has more than 15 years of retail
experience. Since launching in Amsterdam in
2013, the business has grown to service more
than 100 leading retailers including Decathlon,
Samsung, Media Market, Windelen.de, Tennis
Point, Wehkamp, Signa Sport United and Coolblue.
Its Dynamic Pricing module has already
helped existing clients see up to 50%
improvement in sales and margin growth,
while its Dynamic Marketing product has
helped clients experience up to four times
more growth on marketing channels like
Google Shopping.
The leading SaaS solution for integrated
pricing and online marketing automation,
Omnia uses intelligent, self-learning algorithms
to help retailers regain control, save time
and drive proftable growth. It does this by
automating optimal pricing and maximising
returns from online marketing channels.
About Omnia RetailA sound pricing strategy has always been a crucial part of any
retail business. However, in today’s changing market, it has never
been more critical. As the sector becomes increasingly fragmented,
pricing strategies are no longer as simple as they may have been
20 years ago.
Indeed, of the 150 UK retailers we surveyed, 34% said they operate
solely online, with 43% describing themselves as omnichannel and
23% remain purely bricks and mortar; highlighting the diversity of
business models currently operating in the market.
Pre-internet, the average brand had to consider around 4,000 price
and marketing combinations per quarter to stay ahead of competitors.
However, with information on goods and services now available for
consumers to see 24/7, the number of pricing combinations that
businesses must consider has risen to 60,000,000 combinations
a day; making pricing an extremely complex proposition.
Worryingly, many brands - in a bid to remain competitive amidst
ongoing high-street closures and the growing influence of online -
have tried to stand out by simply offering the lowest prices.
This was thrown into particularly sharp focus by John Lewis’s
announcement of a 99% proft slump, which the brand largely
blamed on its ambitious “never knowingly undersold” pledge.
When even industry heavyweights can fnd themselves in a destructive
“race to the bottom,” it’s clear that pricing strategies may not be being
given enough consideration by retailers of all sizes.
Pricing is driven by a vast array of factors, from external pressures
such as sector conditions, consumer demand and competitor activity
to internal variables like stock levels, marketing bids and individual
commercial strategy.
The huge growth of e-commerce, which allows prices, products and
retailers to be compared in just a few clicks, has therefore had a
powerful impact on retailer strategies.
The UK has become one of the most competitive global marketplaces,
with online retail now constituting almost a ffth of all transactions made –
higher than any other country in the world.
Introduction
Retail channel split
Online onlyOmnichannelBricks and mortar34%43%23%。