CultureKnowledgeNewsRetail Industry

Why you need to automate your pricing strategy

By February 10, 2021 No Comments

Electronic shelf labels at a liquor store

Imagine yourself walking through the pasta aisle of a grocery store. As you look for the right noodles, you get stuck choosing between two brands that are similar in quality and come in boxes the same size. So, how do you decide which one to buy? If you’re like most consumers, your decision will probably come down to price.

According to research by Stax insights, “price remains the main decision driver with 50% of consumers acknowledging it as one of their top three considerations.”  

With price being such a major influence on the buyer’s decision, there’s no doubt that having a strong pricing strategy is key for retailers to achieve long-term success. Although many retailers know this already, what many lack is a more optimized way of implementing it.

The solution? Pricing automation. 

Digital Smart Labels™ are micro-e paper displays that wirelessly update prices in real time, allowing retailers to take greater control of their pricing strategy, get ahead of the competition, and elevate the overall consumer experience.

Deliver a seamless omnichannel experience 

The Internet has changed the way we shop. While the COVID-19 pandemic has forced many of us toward online shopping, the shift to e-commerce will never replace the visceral experience of shopping in-store.

According to an article by Deloitte, “Historically pure-play online retailers are increasingly opening brick-and-mortar shops in high-profile locations, seeking to capitalize on the tangible experiences that cannot be delivered through a device.”

This is proven by the amount of direct-to-consumer brands, such as Glossier and Warby Parker, that have opened brick-and-mortar and pop-up stores over the years. But regardless of whether a retailer is on– or offline, at the end of the day, both have the same goal—to provide a consistent and integrated shopping experience across all brand touchpoints. 

One of easiest and most effective ways to do this is through pricing. Electronic shelf labels guarantee complete price accuracy on shelf, online, and at the register—ensuring a seamless experience when making a purchasing decision.

Not only does this boost customer engagement and satisfaction, but it also creates a more positive showrooming experience. Customers will be more likely to make in-store purchases knowing that the prices are consistent across all channels.

Stay ahead of your competition 

One of the biggest benefits of implementing pricing automation is that it enables dynamic pricing. As written in business.com, “Dynamic pricing is a strategy in which product prices continuously adjust, sometimes in a matter of minutes, in response to real-time supply and demand.”

Pricing is one of the most flexible and adjustable elements in the marketing mix. However, updating traditional price labels in-store to reflect market rates takes time and extra labour that many retailers don’t have. E-commerce, the hospitality industry, airlines, and apps like Uber have been using dynamic pricing algorithms for years, so why shouldn’t brick-and-mortar retailers?

By implementing pricing automation solutions, retailers can leverage big data and integrate dynamic marketing tactics into their business strategy to respond to competitor activities, enable hyper-personalization, activate in-store campaigns and promotions, or even stimulate interest in a product that isn’t selling well.

And dynamic pricing isn’t just for lowering prices. Since digital price systems allow you to monitor prices 24/7, they can also be used to raise prices on products that are exclusive to their brand and/or not readily available at nearby stores.

Increase productivity and free up resources

Anyone who’s ever worked in retail knows that updating traditional paper labels involves a lot of time, preparation, and coordination across departments. And sometimes, employees are tasked with updating hundreds, if not thousands, of price labels a day. Imagine how much more productive your retail organization would be if this time was allocated elsewhere?

As reported by McKinsey & Company, “Automating these and other time-intensive processes will enable merchants to increase the time they spend on more strategic activities, creating value for the enterprise.”

Technology tools like Digital Smart Labels™ eliminate the time spent updating traditional paper labels and allow employees to focus on other (and sometimes more important) aspects of their jobs, including customer service, merchandising and stocking shelves, and developing product knowledge. 

Whatever the extra time is used for, electronic shelf labels not only make employees lives’ easier, but also drastically improve in-store efficiency for retailers—a win-win for everyone.

Conclusion

Pricing automation is here to stay. And with retail competition at an all time high, gaining control of your pricing strategy is more important now than ever. Contact us to see how our Digital Smart Label™ solution can optimize your pricing today.