Zumint Blog

Do you have Black Friday Goggles?

With the 4th Quarter in full swing, retailers are gearing up for the biggest shopping week(end) of the year. Retailers have questions on whether they are featuring the right products and whether their promotional pricing will do enough to drive the foot traffic or web eyeballs they need. Brands want to know which channels generate the most traction for their brand and whether any promotions may damage their brand equity. Retailers and Brands need visibility into their products, the competition, and the market.

In the race for consumer dollars during this annual sales bonanza, retailers begin running promotions earlier and earlier. Amazon essentially began Black Friday deals on November 2nd by launching a preemptive “Black Friday Deals store”. In the store, they state: “Black Friday 2015 is almost here, but we didn't want you to wait until the day after Thanksgiving for Black Friday deals, so we kicked off the savings a little early. We are counting down to the big day with even more deals, all day, every day. You'll find Amazon's fantastic early Black Friday sales right here.” Additionally, Amazon is opening up to 30,000 “Lightning Deals” to it’s PRIME members, before the full effect of Black Friday deals are open to the general customer.

Others, like REI, are taking a different approach to the hype around Black Friday by inviting its employees and customers to take a hike and OptOutside (http://optoutside.rei.com/). REI announced it was closing on Black Friday and giving its employees a paid holiday. This is an excellent retail brand move and will resonate with its customers. And, while Black Friday is a big shopping day, the week and month that surround it are just as big.

So with the various approaches and strategies across multiple channels, the question remains: Do you have your Black Friday Goggles? With the right tools, you should be able to see in the dark, through the fog, and at a distance. You need on-demand, real-time visibility into the metrics that matter most to your brand so you can in-season changes that could make a big difference. At a minimum, your Black Friday Goggles should show you:

1. Where are my products listed?

2. Who is selling my products? What merchants are my distributors selling to?

3. What is the list price of my products? What is the average MSRP variance and price change volatility across channels?

4. How much inventory is available by merchant and channel?

5. What is the sales volume and sell-thru rate?

6. What are the Point of Sale demographics?

7. How are my products positioned versus the competition?

8. How are my products performing versus the competition?

9. When is my competitor running a promotion related to my products?

If you have the right Black Friday Goggles, you will have excellent Cyber Monday Vision and the ability to make important and agile decisions based on meaningful insights throughout the 4th Quarter retail bonanza. You may not always have the best line of sight, but the right tools will give you the intel and advantage you need to progress your brand in the desired trajectory.

COMMERCE CLARITY FOR BRANDS

The need for pricing intelligence is not a new concept, but in an omni-channel world, it has never been more important for brands and retailers.  To effectively compete in the disruptive dynamics of retail, having the right visibility and strategy toward wholesale pricing, competitive pricing, MAP pricing, promotional pricing, and MSRP pricing is essential information. 

Real-time visibility to pricing information encourages aggressive price shopping, with showrooming and webrooming becoming the new normal. With the competition just a click away, retailers must win the battle for the customer’s heart and wallet with each and every purchase. And, as retailers need to be more aggressive in their approaches and deploy various repricing strategies, brands need to have a pulse on what retail channels are doing with their brand name.

Here are 6 strategies to be considering or staying ahead of to effectively leverage pricing data to intelligently optimize margins and profits.

1. Understand Your Pricing Position in a Product across Categories and Channels

Retailers and brands need to understand their pricing position for a given product across Categories and Channels. Each channel will have a different category taxonomy and may have more than one product offer listing for that product. There is power in understanding a products price position at an aggregate and specific channel level. 

Manually discovering that information and then aggregating and managing it by spreadsheets is not only ineffective, but it will not provide the deep learning and insights that can be drawn by a big data set that is appropriately architected so you can focus on getting the answers to the questions you are asking

2. Leverage Competitive Data for Smart Pricing Decisions

With more products, more sales channels, and more dynamic pricing, the amount of competitive pricing data available to retailers can be staggering. Just 10,000 products with 10 competitors in 5 different channels can create over 5 million data points in one month.

Big data brings big opportunities, but also big challenges.

The key to success is turning competitive pricing data into smart operational decisions that best position your prices against the competition in every category, at every sales channel, throughout the product lifecycle. Trying to make sense of such vast amounts of data without the right tools is a recipe for failure. To turn competitive pricing data into actionable insight, you need a tool that allows you to visualize the data, slice and dice it by competitor, product, and channel, assess the impact of competitors’ prices on your sales, and evaluate multiple what-if scenarios for your competitive response.

3. Combine Pricing Data with Internal Data and Sales Velocity

The real power of competitive pricing data is realized when this information is laid against your internal data. 

Cost data 

Product cost information is fundamental, allowing you to understand what your margins are for each product and where you need to take action to maximize profit opportunities.

Sales data

Cross referencing competitive pricing information with sales data allows you to understand the real impact of competitor prices on your business. Armed with this information, you can better pre-empt and respond to the moves of the competitors that really matter. It also allows you to identify low converting items that may require more competitive pricing.

Inventory data

Keeping an eye on inventory levels and velocity allows you to adjust your pricing decisions accordingly. It allows you to identify items that are performing below expectations due to non-competitive prices. At the same time, you may be able to raise prices and capture higher margins on products that are low on inventory and hard to replenish.

4. Track the Pricing Lifecycle

Understanding the product lifecycle and applying the right pricing strategies at each stage is one of the qualities separating winners from laggards. Retailers who are winning are twice as likely to address end-to-end price lifecycle management compared to the industry’s laggards.

Each stage of the product lifecycle—from introduction to growth, maturity, and decline—brings its unique pricing challenges and opportunities. Each stage calls for different actions, requiring a different set of tools. Understanding competitive pricing through the product pricing lifecycle will help you continue to compete in a category and channel.

5. Control Your Sales Channels

Further complicating matters is the proliferation of sales channels and online marketplaces. A retailer may have one set of competitors offline, a different set of competitors online, and yet another on Amazon or Walmart.com.

Prices in these marketplaces can vary from those in the retailer’s own channels, adding yet another level of complexity that can challenge even the most sophisticated retailer: Who is the competition in each of the channels? Which products should we sell through each channel? What is the right pricing strategy for each?

Retailers and Brands need to know MSRP and MAP pricing thresholds and track pricing trends against those so they can understand how well they are controlling a particular sales channel and also recognize any cross-channel conflicts that are being created, as they arise. 

Retailers need to know if there are any cross-channel impacts that are significant enough to alter a Purchase Order decision on wholesale price or quantity ordered.  Brands need to know if cross-channel impacts related to MAP price violations or Product Line listing violations are damaging their other retail trade partner relationships.

6. Understand Who Your Real Competition Is

Knowing which competitors actually impact your sales for each product and category is paramount to a successful competitive pricing strategy.

Retailers tend to have a different set of competitors in each category, and sometimes even within the same category. For example, an office supply retailer can have one set of competitors impacting sales for printers and another for printer ink.

That’s where competitive elasticity comes into play:

Price elasticity helps you understand how customers react to your price changes. Competitive elasticity gives you the ability to understand at a product/category level how your sales are impacted by changes in each competitor’s price.

Correlating competitive pricing data with your own sales data (both online and offline data) gives you the insight you need to effectively adjust your prices to meet volume and margin goals.

With the ease of comparison shopping, retailers must fight like uber-smart sharks for the consumer’s purchase but be as friendly as kittens. And, while retailers fight for the consumer’s eye balls and ultimate purchase, they need to be in lock step with their important brand trading partners. 

For retailers, there isn’t an initiative more broad, deep, and complex than working to unify the retail experience across all their channels. Brands have their name and products flowing through the omni-channel strategies of their authorized retailers. As brands invest in building their brand equity, they need to make sure their omni-channel objectives align with the omni-channel actions of their retail trading partners.  

The omni-channel consumer expects everything to be readily available at his or her fingertips and expects the overall brand experience to be similarly accessible. Over 80% of store shoppers check prices online, with one-third accessing the information on their mobile device while inside the actual store. The power has shifted to the consumer, who is now sitting firmly in the driving seat, with an insatiable appetite for retail to be faster, cheaper and better.

Brands and brand manufacturers need to protect brand equity throughout all the channels their customers consume their products.  To do this well, brands need to have visibility into how, when, where, what price, and by who their brand name is being made available to consumers.  Brands need to ensure they are considering the following objectives in their omni-channel strategy:

1. Trusted Partners

2. Transparency

3. Data

4. Analytics

5. Price Control

6. Brand Experience

We are excited to announce Zumint is launching a commerce utility that helps Brands and Retailers grow their social business network, establish their commerce graph, discover and manage trade relationships, share product information, and deepen commerce intelligence. We help brands & retailers trade smarter.

Request an early invite today.  Come see a demo of Zumint Analytics solution!