World Retail Congress is always a high-energy event and this year’s conference in Rome was no exception. With a variety of insightful break-out sessions to choose from, the panel titled “Kicking the Discounting Habit” stood out as one of the most well-attended and engaging sessions of the conference. And it’s no surprise – everyone knows this is a hot topic for retailers and shoppers alike. Price is top of mind for shoppers today and a retailer’s biggest margin lever. It’s incredibly critical to get every shopper the right offer, at the right time, via the right channel. WRC retailers were hungry to hear from their peers on pricing and promotion strategies and tactics that build shopper loyalty, enable them to compete more profitably and support their brand image while escaping the ‘race to the bottom’ death spiral.
Two of Revionics’ European customers, Argos and METRO Cash & Carry, participated on the panel, as did our Chief Science Officer Jeff Moore. Forrester Research VP and Principal Analyst George Lawrie moderated the panel asking incisive questions and keeping the conversation relevant and engaging.
Pricing Optimization Practice and Technology:
Richard Millar, Business Development and Commercial Planning Director at Argos, shared how pricing optimization – putting their shoppers at the heart of their pricing decisions – was a part of a larger transformation project that Argos undertook several years ago. A key component of the initiative was to leverage technology and science to price like a digital retailer and turn today’s liabilities of price transparency and competitors everywhere, including Amazon, into a differentiating asset. Richard went on to share how demand-responsive science and predictive analytics have enabled Argos to price dynamically and deliver the right price all of the time, focus on competitors that actually matter to avoid giving away margin when it doesn’t matter to shoppers, make science-informed decisions and consistently implement their business strategy.
The use of technology has also enabled Argos to better utilize and operationalize more sources of data to inform pricing and promotion decisions as well as understand and measure the impact of those decisions.
Lastly, Richard revealed how core automation capabilities provided by price optimization technology have enabled them to double their assortment without increasing the size of their pricing team! Mauro Muraro, METRO Cash & Carry Italy’s Head of Customer Relationship Marketing, Market Research and Price Strategy, has used our price management and optimization capabilities to really drill into key value items (KVIs) in a high-impact way.
Mauro talked about their business shift away from an enterprise-wide high-low strategy to localized pricing in each of their 44 stores to respond to local competition and local shopper preferences, adapting KVIs accordingly. They have also successfully been able to wean shoppers off of constant promotions by delivering better value every day.
Jeff Moore’s brought home the customer-centric message, noting that Revionics’ analytics algorithms are designed to deliver both usability and cutting-edge data science to produce the kind of results Argos and METRO Cash & Carry discussed. To win in today’s dynamic, hyper-competitive marketplace where shopper and competitor behaviors are constantly changing, pricing needs to be strategically driven and technology-enabled. Data is the new fuel and optimization software systematically operationalizes it at speed and scale for smarter, faster decisions. Combining data-driven optimization with well-honed merchant art enables retailers to be both more efficient and more effective.
It was stimulating to be in the room to hear a range of road-tested viewpoints from some of the industry’s most inspiring innovators. There’s a good reason for the packed house!