Competitive pricing main concern for US retailers: Study

Of the retailers surveyed from December 2021 to January 2022 across multiple categories including apparel and footwear segments, 10 per cent had worse than average sales (retail laggards), 35 per cent had average sales, and 55 per cent had better than average sales (retail winners), according to according to Retail Pricing 2022: Bringing Agility and Precision to the Art of Pricing, by Retail Systems Research (RSR) and DemandTec.

The report found a gap in retailers’ attitude about what – and who – is driving pricing issues in the first place followed by the gap in retailers’ capabilities where 64 per cent of retailers said they are pleased with their ability to establish a price strategy for regular and promotional products. That number is much lower for average and underperformers at 36 per cent. Another key finding of the report was the fear of customer reaction, where 29 per cent of retailers are fearful that any change in prices could bring about a negative reaction from customers.

The survey also found a gap in retailers’ perception about artificial intelligence (AI). More than half of average and lagging retailers deem it vital, while the remainder call it a nice-to-have feature. More important, nearly all the best-performing retailers in the study said that advanced retail pricing technology is essential to drive business improvements going forward (82 per cent).

“With the lingering effects of a global pandemic, supply chain concerns, and economic uncertainty over the war in Europe, retail pricing technology has rapidly become a priority need. If your company is not fully confident in its ability to make rapid pricing decisions and changes – right now – it’s time to begin serious internal conversations about how to shore those systems up,” RSR partner, Brian Kilcourse, co-author of the report, said.

“In the end, retailers should know that closing the pricing readiness gap is now a critical component of overall retail strategy. It is clear that in order to win, precision pricing is a must-have, not a nice-to-have,” Kilcourse added.

ALCHEMPro News Desk (SF)