A Buyer’s Tale about Price Intelligence:
As a former consumer electronics buyer for a Fortune 50 multinational retailer, I was on the front line when it came to pricing. The focus was on me to ensure the items in my categories of responsibility were priced competitively, while ensuring I stayed within budget and margin requirements for my department.
I would spend hour upon hour (sometimes totalling up to two full days in a week) scouring websites, flyers, deal forums and even blogs to ensure that my category assortment was priced competitively. I would review pricing manually and did not have an automated solution to help me easily identify gaps in the way I priced the products in my categories. This became a frustrating and often futile experience due to the speed at which the competition would change their pricing. It did not suffice to simply review competitor pricing once a week, or depend on the dates of advertised promotions to gauge when I should set and reset my prices. Prices are constantly changing, especially in the online environment. Often I would set prices one day only to have to set them again the next due to a competitor reaction! Invariably, there were some retailers changing their prices a few times a day, and it was impossible to keep up!
Ensuring I was priced right was extremely important. Being outpriced on a key item (i.e. a top-selling TV) could mean that our valued customers would buy that TV at a competitor. On a key item such as a top-selling TV, this could translate into a loss of hundreds of thousands of dollars in revenues. Competition in the consumer electronics industry is fierce. It is one of the most volatile industries when it comes to pricing and it is extremely important to be ahead of the curve.
In an industry like consumer electronics, which is more price-sensitive, price becomes a key factor when making a purchase, and can be the deciding factor when choosing which retailer to purchase from. As you can see from the Forrester-Aprimo graph below, consumer electronics is the most showroomed product category, meaning the consumer researches and tries product in store, but decides to buy it elsewhere.
Most Commonly Showroomed Product Categories
As a former buyer who now works in the price intelligence world, I have seen how 360pi’s solution can really help a buyer/merchandiser make more sound pricing and merchandising decisions. You will notice that I mentioned the word ‘merchandising’ here. You see, combining a price intelligence solution with merchandising experience can really be a powerful recipe for buyers/merchandisers. If only I had known then what I know now…
Over the next few weeks, I will be providing insights into how price intelligence can not only help you be competitively priced, but also how it can help you be more effective in many areas of your business, including merchandising and promotions. I will share some perspectives on how to use price intelligence data to save time and valuable margin dollars, evaluate and set promotions, assess pricing trends to plan a program, and create additional value propositions. These are just some of the topics I will discuss over a series of blog posts. I will cater my posts to all of the merchandisers out there, especially those still wondering how price intelligence can really help improve their business. I have been through what you are going through and look forward to sharing my experiences and thoughts with you.
A Buyer’s Tale About Price Intelligence is part 1 of a multi-part series. Stay tuned for more Winning with Price Intelligence: A Merchandiser’s Guide with Francesco Fotia
Other posts in the series: