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What are your priorities for spending your tech budget? Working in retail, your days are crazy, and with the influx of data and insights from heightened digitalization, they are only getting busier.
Navigating the complex and dynamic world of retail and remaining competitive requires retailers to make informed decisions quickly. In the previous blog, we talked about the importance of quickly identifying and prioritizing opportunities for assortment planning. This process is also crucial when developing pricing and promotion strategies.
If things like “first price, right price,” personalized promotions, and optimized full-price sell through are important to you, a retail intelligence tool should be on your wish list. According to McKinsey, by 2030, fashion companies are expected to double investment in technology to create a competitive edge. They explain:
“Based on our research, we estimate that applying integrated digital solutions to merchandising could lead to up to 50 percent faster time to market, an eight percent rise in full-price sell through, and a 20 percent decline in manufacturing costs. It could support in-season pricing and promotions strategy, as well as feed data-driven range planning and optimization.”11
Some of the key challenges retailers face when planning or adjusting prices and promotions include:
While these areas are crucial in creating effective pricing and promotional strategies, with overwhelming volumes of data and manual processes, it can be difficult to identify and prioritize the most lucrative opportunities.
By implementing a retail intelligence tool into your business, you gain a connected view of your company, competitor, and third-party pricing and promotional data. This data is combined in a single source of truth that presents complicated metrics as easy-to-understand insights, so you quickly get answers to the most pressing questions and can make decisions accordingly.
1. Promotion & Campaign Planning
Identify gaps from a promotional and campaign standpoint based on competitor activity. Retail technology gives you real-time and historical visibility into promotional activities, marketing messaging, and product positioning across your own as well as your competitors’ email communications and direct sites. You can visualize major promotional periods throughout the year and understand how certain campaigns or promotions performed to inform your strategy.
2. Pricing Optimization
Get complete visibility into retail pricing strategies across multiple markets to determine how you stack up against competitor prices. By understanding how the competition is setting price points and pricing architectures, you can identify white space when planning your pricing strategy. When you have the ability to find pricing opportunities quickly, you can stand out from the competition and improve your margins.
1. Promotion Management
Be agile and respond quickly and proportionally to competitor promotional activity, such as new messaging or profit-driving opportunities as they arise. This technology allows you to identify opportunities quickly so you can ensure your promotions are in line with the competition while being profitable, and that they align with market demand and resonate with your customers.
2. Pricing Adjustments
See what price points you might be missing in the market and quickly understand where you can adjust to become more profitable. Understanding the market through contextualized insights allows you to shift pricing so you are not under or over-priced. By using this AI-driven technology, you can make these adjustments while they matter most.
One success story in terms of exposing and prioritizing pricing opportunities with retail intelligence is Woolworths. The South African retailer used EDITED to identify a winning opportunity in its homeware category.
“We were analyzing a category in our homeware department, and for one product, we discovered we could add several options in a higher price bracket, based on where the rest of the market was sitting,” explained Lilize Diener, Senior Buyer at Woolworths.
This decision represented a significant revenue increase opportunity and meant the business was able to shift pricing on 29% of this category’s assortment to raise prices by 110% and drive margin improvement.
Whether it’s pre-season planning to identify gaps and optimize pricing or in-season trading to respond to competitor promotional activity, leveraging technology-driven insights empowers retailers to stay agile and ahead of the curve in the dynamic world of retail.
Discover how EDITED can take some of the crazy out of your day and help you identify the highest-impact pricing and promotional opportunities. Book a demo here and start driving sustained growth for your business.
Sources:
EDITED Market™
EDITED Digital™
EDITED Omni™
EDITED Signal™
EDITED Data™
EDITED Messaging™
EDITED Match™
EDITED Overlay™
EDITED Research™
