Category Archives: Pricing

Customers want better promotions

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The Grocer and the press are giving a lot of coverage to the importance customers give to clear pricing and quality offers. What can retailers do to increase shopper trust in their promotions? The purpose of any in-store promotion is ultimately to sell more products but promotions also play a key role in attracting customers to the store and encouraging them to keep coming back for more. However, to get all three benefits from a promotion shoppers have to be able to easily understand the promotion Read more [...]

Customers feel misled by supermarket prices – according to Which research

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Retailers are making large investments in their stores to improve customer experience and get customers to buy more in stores, but unit pricing can frustrate shoppers. Which? research out today shows that 74% of people think supermarkets try to mislead them with confusing prices. They cite an example of a bag of three mixed peppers at £2.25 per kg or three loose basics peppers at 55p each and ask "which is the best value?" Richard Lloyd executive Director of Which also pointed out that many Read more [...]

Coupons can be dangerous

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As the UK continues to ramp up the use of coupons it's worth bearing in mind a story from the USA who have been much more prolific users of coupons for many years. JC Penny, a mid market chain of department stores in the US, ran nearly 600 promotions last year. Most were based on coupons. To stimulate business and get shoppers to visit their stores more often they decided to implement a change of strategy. They stopped producing coupons almost overnight and moved to an everyday low price (EDLP) strategy using Read more [...]

The big question for shoppers

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Shoppers at the shelf edge often have one nagging question. Can I get this same item cheaper at another store? If you are in a grocery store looking at branded products the answer is much more likely to be no.  All of the big grocers have some form of price matching and now Waitrose has just announced: From today, our prices on branded grocery products are now identical to Tesco’s, excluding promotions. Every day common pricing (EDCP) EDCP is simpler for shoppers as there is less Read more [...]

Optimisation

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With a No1 objective of raising profits without selling more items it's not surprising that most retailers are investing in ways to help them optimise pricing. Software to manage markdowns, adjust prices based on competition, demand and even weather conditions are now being more widely used or evaluated. Claims are being made of improvements to gross margin of 1-5% in certain defined segments. More than price While price is important optimisation is not just about price, or even tuning websites. Read more [...]

Retailers top objective for 2012

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The top objective for retailers in 2012 is to raise profits without selling more items, according to Bjorn Weber from Planet Retail. Not any easy thing to pull off but I think that it's an excellent objective to test every business decision against. If an action does not help you achieve this objective either don't do it, or do it differently. Retailers have moved on from just cutting costs. The obvious reductions have already been made and some cost cutting actually damages profitability, particularly where Read more [...]

Waitrose score high on value

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Which, the consumer magazine, asked 11,000 members in October 2011 what they thought about supermarkets and the results are now in. The overall winner by a considerable margin was Waitrose. This is the third year running that they have achieved this - congratulations to Waitrose. But wait a minute, how can this be? In these harsh financial times we keep hearing that shoppers are watching every penny and going out of their way to get the lowest prices.  So how does Waitrose manage to get such Read more [...]

I want to pay more

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Not all shoppers are choosing to buy the cheapest products possible.  A recent survey of 1,000 shoppers by IGD has shown that 30% of under 35's are prepared to spend more money for quality products while only 16% of over 35's had a similar opinion. Younger shoppers obviously consider price and they even have higher than average access to technology which compares prices for them.  In spite of this many still identify specific factors which cause them to buy certain higher priced products. Perceived Read more [...]

Price is irrelevant – You have to buy from us

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Price has become the main tool for many retailers to get and retain customers. The obvious problem with this approach is that ultimately margins shrink and cost cutting starts to damage customer experience and the overall business.  As retailers test out different ways to maintain or grow sales unique products are proving to be very useful tools. One obvious example is the rapid development and growth of own brand products, particularly in supermarkets and department stores. Own brand products Read more [...]

Shelf edge power – Why buy me?

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Faced with a range of similar products, all with clear price tickets, customers at the shelf edge decision point look for clues about which product to buy. Unless they have some preconceived opinions or influences their main guide, whether we like it or not, is price. In their heads they rapidly categorise the cheapest, dearest and roughly what's in the middle. Depending upon the specific product category and a number of other personal variables they make their selection or, do the worst thing Read more [...]