PAIN RELIEF: Cross-channel pricing and promotions

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One of our biggest challenges is managing pricing across channels – online pricing vs in-store pricing vs catalogue pricing. Is price matching across all channels our only option? Any good ideas for managing cross-channel pricing?

One of our biggest challenges is managing pricing across channels – online pricing vs in-store pricing vs catalogue pricing. Is price matching across all channels our only option? Any good ideas for managing cross-channel pricing?

Newman: A very good question! The product category will have an influence on how the retailer prices goods across different channels. For example in electricals, pricing is so competitive online that it would be potentially catastrophic to not be price competitive. However, that doesn’t mean that the retailer couldn’t have higher prices in store. This proposition could be supported by including some added value services in store such as after sales advice and support that wouldn’t be available to online customers. This could involve helping the customer set up their new PC or new TV in their home. Or offering after sales service with technical issues.

In other sectors such as fashion, It’s also a good idea to think of alternative or exclusive products to sell online as the retailer would have less direct competition and wouldn’t have to price match with their other channels of business.

Of course a multichannel retailer also has to compete with online ‘pureplay’ ecommerce retailers.
But again the multichannel retailer has the advantage of offering a more compelling ‘cross channel’ proposition to the customer e.g. buy from and return to their channel of choice.

Article by Martin Newman

100% results and ROI-oriented, Power Retail's UK expert Martin Newman is CEO of Practicology and one of the most experienced, best-known and respected e-commerce practitioners. He has been involved in multichannel retailing for over 25 years, and his current clients include Ben Sherman, T-Mobile, Edinburgh Woollen Mill and the Science Museum.

2 Comments

• • 
  • Mot
  • 6th October

  Interesting question!

  Price matching and the transparency of pricing created by the ‘digital age’ (and all the channels and tools that came with that) raises a number of concerns for retailers. My feelings are that in-house consistency should be priority #1… That is, to ensure the pricing of your OWN products is consistent across all channels. There are tools that can help facilitate this, but most importantly it’s about process. I don’t have to articulate why this ‘in-house’ consistency is so important.

  A close second should be VALUE considerations as outlined above. All this price transparency in the market means that just about any retailer will meet just about any price found just about anywhere… And so the emphasis is placed back on the VALUE.

  …Does the consumer place relevence on the value that can be found in your brand? In your convenience? In your service? In your fashionable carry bag? or maybe In the loyalty or rewards program? ‘Brand’ only
  becomes more important than ever in my opinion.

  *Why are we all too happy to pay $5 for a Gatorade at 7/11? Because the value is not in the product itself, but in the convenience of a 2am purchase on the way home from the pub.

  Oh and don’t forget to address all this digital, email, social etc price matching stuff in a price matching policy (and staff training)! Just one of the many traps now confronting the “I-think-we’re-truly-ready-for-ecommerce” retailers.

  Thoughts?

  Reply
• • 
  • Martin Newman
  • 26th October

  Hi MOT,

  Thanks for your response. And some relevant points.
  Apologies for the radio silence! Been a little busy on this side of the globe:)

  I don’t think the issue is transparency. Nor is it about value from a cost perspective. Although price is important, and more important in certain categories such as electricals, the web is first and foremost about convenience (And your point about Gatorade and 7/11 plays to that). So the retailer has to strive to deliver a convenient customer proposition otherwise the customer clicks away and takes their business elsewhere.

  The retailer needs to appreciate that different channels offer different opportunities to engage with different customer groups.

  However, I do agree that you can’t just have different pricing across different channels. The only way this works is if the value proposition has added value to it not in terms of cost/price but in terms of service.
  As my initial article discussed.

  Cheers,

  Martin

  Reply