If you're in retail, listen up. A study conducted by Empathica showed that while in stores, 55 percent of smartphone owners compared prices between retailers. Think about this stat's gravity--while in your very store, over half of your customers are using smartphones to find a better deal and take their business elsewhere.
Fortunately, brands can also empower themselves with pricing technology to keep ahead of their competition in retail pricing wars. At Rise Interactive, we partner with 360pi to better understand competitive pricing and increase sales for our e-commerce and retail clients. Working with Alexander Rink, CEO of 360pi, we've outlined four tips to help you dominate the retail pricing war.
1. Get Out of Showrooming Denial
It's becoming faster and easier for shoppers to compare prices, and yet some retailers are still in denial that showrooming--when shoppers peruse brick and mortar stores but purchase online--is taking place in their stores. The sooner retailers accept that this is happening, the faster they can take the next steps to overcome it.
The first step retailers need to take is to gain visibility into how they are priced compared to their competitors. Often times this gives retailers the hard data they need to determine if their pricing strategy matches the reality of the market.
One tactic that brick and mortar retailers are taking to combat showrooming is to match prices of online retailers on a year round basis. Best Buy is one retailer taking this approach, and one of its spokesmen, Jon Sandler, stated that "showrooming is now dead to us" because of this strategy.
2. Make It Easier for Your Customers to Comparison Shop
This statement can make a retailer quiver; it sounds counterintuitive, but it works. Consumers have a great knack for finding deals, so they will appreciate it if you make it easier for them to do so. Retailers like Sears Canada recently created a web app for their customers to check the prices of their competitors with a single click.
This kind of functionality gives customers two things: confidence that they are getting the best prices and comfort that they are making the right purchase. Even in scenarios when the retailer is overpriced versus competitors, the retailer can match the price and avoid losing that customer.
3. Take Advantage of Automation Technologies
There is no denying that competitive pricing data is useful for retailers, but the question is how do they attain it? We have encountered many retailers who had entire teams spending countless hours manually checking retail prices online and in-store. There are several price intelligence tools on the market that automatically do this kind of task, in near real-time, with higher accuracy.
The competitive price data can be used in several different ways, one of which is to optimize paid search campaigns. In some cases, we've seen it boost conversion rates by up to 50 percent by limiting products where the retailer was overpriced versus the competition.
4. It Does Not Always Have to Be a Race to the Bottom
Although price is a critical factor (and sometimes the only factor that matters), retailers can still win by understanding what makes them great and providing their customers with exceptional service, sound expertise, convenience and the peace of mind knowing that they are buying from a reputable seller.
To sum it up, understanding your customer's retail shopping behavior is crucial. It will allow you to react and utilize pricing technology that will keep you ahead of your competition. Companies that adapt quickly will capture more market share, increase website traffic and achieve longevity.