Using specialised merchandising as well as implementing strategic sales techniques, profits can still be made and retailers can live in relative harmony with the people who keep them in business, the customers.
Changing the price of products as demand increases sounds fair enough, and everyone wants to make a bit of money in the busy seasons. But dynamic pricing – which is mostly used within eCommerce, although becoming more popular with bricks-and-mortar retailers – can alienate customers if they find their friends having paid less for the same product in a different store.
The key to the success of any retailer is to be fair, honest and satisfy the customer’s every whim by offering them exactly what they want, at a reasonable price. However, when seasons get busy, the retailer is somewhat caught between a rock and a hard place: do they push up the price at the risk of losing happy customers, or do they reduce the price at the expense of their own balance sheet? It’s a tough one to call.
Retailers have the power to change this perspective, though. Using specialised merchandising as well as implementing strategic sales techniques, profits can still be made and retailers can live in relative harmony with the people who keep them in business, the customers. Meeting their intent is critical.
Transparency is key
Headed up by ANZ CEO Andy Kirk, for many years CROSSMARK has been helping customers meet their performance objectives. Speaking to Retail World, Mr Kirk shares his thoughts on how the needs of the grocery channel still differ from other retail sectors and how CROSSMARK is tailored for grocery retailers specifically.
“Grocery is a fast moving, dynamic channel,” he said. “Speed and flexibility matter more in grocery than in some other areas. If promotions are not activated or displays not built and ready for shoppers on day one, it can translate into seriously impacted sales.
“The sheer volume of footfall in the grocery channel creates a need for on-shelf maintenance and upkeep that doesn’t manifest in other channels to nearly the same degree. Combined with the number of products on display and limited in-store staff, it makes grocery a demanding channel for brands and retailers to maintain high standards of availability, display, and shopper experience, which all translates to sales.”
Mr Kirk says CROSSMARK has created service models for both brands and retailers that focus on speed and flexibility to meet some of the unique challenges of grocery.
“Through our own proprietary software and field team, we can dynamically deploy our specialist grocery team to stores at short notice, and the scale we have allows us to service the whole channel in a very short time frame, therefore minimising lost sales opportunities,” he said.
“Were working closely with both brands and retailers to utilise direct store data, identifying items with compromised sales to tactically deploy and fix specific issues in specific stores.
“Though live reporting from stores, which is instantly available, brand owners and retailers can see exactly what’s happening in every store CROSSMARK visits on their behalf. In addition to this, the business insights. Tools, and data mining capability of the team allow data-driven insights to be fed back to clients to help [them] make smarter, more effective decisions going forward.”
When asked if dynamic pricing is something that all bricks and mortar retailers need to be thinking about more, Mr Kirk says it has a range of uses for any retailer if applied in the right way, but if not, it could end rather badly for the customer.
“Dynamic pricing is another step towards allowing for more personalised pricing based on a range of factors: location, time, buying patterns and behaviour,” he said. “The key risk with implementing this type of approach is an erosion of customer trust and the potential downsides of customers believing they’re suffering from price discrimination – potentially paying more than another person for the same product in the same location.
Catering to the Customer
“Retailers need to keep delivering on a customer’s intent. They must continue to deliver a shopping experience that cannot be replicated online and a tangible benefit to bricks and mortar, whether that’s engagement, convenience, interaction, range, price, environment or one of the other range of factors that drive a shopper’s purchasing decisions.”
Mr Kirk says grocery brands are experiencing some of the toughest years on record due to the competitive landscape driven by the evolving needs of shoppers and their increased choices.
“With such a difficult trading environment, it’s becoming increasingly relevant to adopt a specialised merchandising approach closely aligned to strategy, in order to deliver an incremental return on investment,” he said. “At a time when consumer, retail and market data is at our fingertips, merchandising resources can be targeted to meet a brand’s objectives and measured closely to ensure strategic relevance.”
This excerpt feature is from Retail World's May 2019 issue.
Andy has a deep understanding of the Australian retail environment and its shifting dynamics. Prior to CROSSMARK he has held a number of senior leadership roles in Australia and the UK, delivering retail strategy and field marketing initiatives for the blue chip brands. Andy is a firm believer in the power of data analytics to boost sales performance for brands and retailers.