Editor’s note: Sanjeev Sularia, Chief Executive Officer and co-founder of Intelligence Node, argues that if your brand has any chance of making a play this shopping weekend, pricing is key. His post is also relevant to non-retail organizations and even government. No matter what field you are in, ask yourself, can you change as fast as the situation requires you to? -bg
Bargain hunters are gearing up for a massive pre-Christmas offline and online spree, with global Black Friday promotions expected to top $11 billion this year.
However, unless customers know what enticing deals you have readily, it’s superfluous effort from your point of view.
The problem is that pricing is a bigger issue in US retail than anyone suspects. Put simply, it takes too long to react to a competitor’s pricing movement and the consumer’s shift in buying patterns.
We track 140,000 brands and we know how long it’s taking to change prices, both off- and online. Our insights into the US retail ecosystem – based on real-time, comprehensive data feeds – proves that the majority of ecommerce sites are very slow at refreshing online prices.
While retailers like Amazon can update their pricing structures in two minutes, the average ecommerce site takes just under 43,000 minutes, or 30 days, to make a change.
Incredibly, the US offline market average is ten times slower, at 270 days.
Surviving the merciless Black Friday competition
No matter how fast you might get an item on your shelf, if you can’t keep your pricing relevant to market and consumer expectations you are one step behind. Today’s consumer values availability and price comparison, making them hyper aware of the wider state of the market. That’s why leaders like Amazon have invested in technology to make them highly responsive to price fluctuation – an investment that means Jeff Bezos can make a pricing change to counter competitor or consumer movement in two minutes, thanks to superior (but not magical or unattainable) technology.
If using technology can make you, as a merchant, competitive and able to appeal to the consumer faster than anyone else in the market, it’s going to help you meet your Black Friday objectives.
The next lesson is around technology enabling a proper handle on all your inventory.
There is often a lack of standardized product taxonomy for SKUs – hobbling attempts to better classify and sort items across sizes, colors and design elements across all the categories consumers want to work with.
To make matters worse, when the same product – say, a Sony Bravia 50 ins HD Smart TV – has different product IDs, shades of color, features, size, and so on, in the system – or there are retailer-specific Unique Product Codes instead of brand SKU id – then the retailer database is even more opaque than before.
Let’s take one innocuous looking word: ‘grey’. A lot of items people buy are in this color – but did you know there are actually multiple definitions of grey? On average, there are no less than 30 names in supplier systems, with variants labeled everything from ‘slate’ to ‘charcoal’ to ‘silver’ to ‘ash.’ Your system needs to be able to work with this complexity, but in ways that also make it simple to manipulate the data to get the results needed.
Omnichannel is also key
A Black Friday contender needs better, sharper ways of understanding its data if it wants any chance of meeting the demands of seasonal promotions and shopping dates.
The third and final obstacle is the need for a single view of inventory, something that is all-important in retail but which for historical reasons is something of a Black Swan level rarity. That single view is helpful for Black Friday shopping dates or holiday season promotions. That’s because a single view of inventory would, at a stroke, give you the power to serve the same customer across all of the channels they choose to use, giving them the option to buy the same product, in a variant of their choice, at a consistent price, across all your channels.
Getting your slice of the Black Friday sales is important – but to get there, retailers needs to take a long, hard look at the way they work with their pricing, data and channel strategy.