Retailers to Explore Personalized Pricing and Promotion
In the age of the smartphone, retailers feel that shoppers are one step ahead of them. With instantly available information, shoppers who are increasingly price sensitive can compare what one retailer is charging for a specific product with what they’d have to shell out if they bought the product online line. To combat this trend, retailers are using a variety of techniques, including personalized pricing.
There’s no denying that price is one of the top influencers on consumers when they are shopping. NPD, earlier this year, reported that 85% of online shoppers considered price and 75% look for sales and deals. The complexity increases when a retailer is selling the same product in multiple channels. Currently 49% of retailers say they sometimes charge different prices in different channels while 45% have a policy of keeping their prices for a product identical across all channels. 6% of retailers say they always list lower prices in some channels, often online, than in others.
Analysts believe that forward-thinking retailers may soon be pricing their products in a whole new way. The price a shopper sees for a specific product in a specific channel may be personalized, based on previous shopping habits. RetailWire recently considered this situation and reported that retailers believe the following pricing strategies could be effective in combating the transparency that is currently driving prices and profits down:
- Personalized pricing/promotion (relevancy based)
- Continuous surveying of competitive pricing, and then adjusting (especially online)
- Single zone pricing (same price all channels and locations)
- Pricing based on shopper segmentation
- Promotions on specific channels
- Constant price matching
It’s fascinating to see the strategies being developed to address the disintermediation in the retail marketplace. As retailers adopt any new strategy, they’ll also need to revise their marketing.[Source: Retailers Experiment with Varied, Personalized Pricing. Emarketer.com. 26 Oct. 2012. Web. 5 Nov. 2012]