Delivering a quality shopping experience with omnichannel pricing

Industry Insight

While the average customer may use a bevy of retail channels to make a purchase, that does not mean they view all of these different avenues as being unique. Whether customers are on a brand’s website, mobile app, in-store location or anywhere else, they expect a consistent shopping experience. This means similar color schemes, product offerings, branding elements, services and policies, but most importantly, the same price points for items.

Think of the matter from the customer’s perspective – they do all the online leg work of reading reviews, comparing prices, finding the the right merchant, checking local inventory levels and trekking into the store, only to discover the prices for the same item are different at the actual brick-and-mortar shop. It makes the merchant look disorganized and leaves the customer feeling frustrated and angry – two emotions that will not inspire repeat purchases.

“The purpose of omnichannel retailing is to provide a seamless customer experience across all possible touch points, including stores, catalog, mobile, online and social media. As far as most customers are concerned, channel is irrelevant,” asserted the Park Avery Group. “It does not matter how or where they buy something, they expect their experience to remain the same.”

Why setting the same price is not that easy

Unfortunately for merchants, establishing one price point is not as easy as it sounds. Sure, for some sellers, it may be a simple mistake – they intended to have the same price across all channels, but perhaps the wrong values were entered at some point in time, and it resulted in a wrong price point. However, there are several legitimate reasons to have different prices.

For example, demand often wanes and changes depending on the channel. An item could be a good seller online. However, in one specific retail location, the same SKU could be a slow-moving one.This is never good, because retailers only have so much space to hold items. The brick-and-mortar location may opt to hold a sale to offload the excess stock. However, then word gets out and online customers get frustrated they cannot get the same price.

To make the issue even more pressing, customers have grown increasingly sensitive to prices. According to one report from Retail Systems Research (RSR), this increased sensitivity only makes addressing the customers’ needs more complex. Nearly half of sellers noted major hindrances in implementing an omnichannel pricing, including pricing aggressiveness from competitors, the need for greater price transparency, the desire to protect the quality of their brand’s image and the satisfaction of their own customers.

“I think retailers underestimate the damage they do to consumers’ trust when a shopper finds a different price in a different store or online.”

“I think retailers underestimate the damage they do to consumers’ trust when a shopper finds a different price in a different store or online,” Baird said in an interview with Retail TouchPoints, “while offering no rationale or explanation for it other than demographics or geography.”

On top of those factors, retailers face challenges rolling out omnichannel price points as well. Trying to coordinate price adjustments in real-time across multiple channels and locations can be a hassle and result in mismatched price points. Regional differences – particularly when dealing with international markets – also impact price points. Of course, channel-specific competition is something brands need to keep in mind as well – how do they compete with other merchants that utilize different channels and can afford to operate with lesser margins?

“Many retailers are going through a transition to re-organize the merchandising and marketing teams for in-store and digital channels for both regular and promotional pricing,” said Kathleen Egan, vice president of price strategy for Revionics told Retail TouchPoints. “Organizations have to align to shopper behavior across channels, as well as pricing types.”

Crafting the right price strategy for the intended audience

When addressing an issue as complex as pricing strategy, there will inevitably be some hangups. Moreover, there is no “one size fits all” strategy that merchants will deploy – they need to look carefully at their own needs and the expectations of their customers.

A little bit of transparency can go a long way. The key is keeping shoppers in the know.

Fortunately, there is some room to work with. While customers have come to expect the same prices across all channels, a little bit of transparency can go a long way. The key is keeping shoppers in the know – if people are told in advance they need to buy online to get a price or that certain deals are available only in store, they are at least aware of the rationale behind the inconsistencies.

But merchants should look to their product management solutions as a key to maintaining price consistency across all channels. Exceptions should be kept to a minimum, and successful retailers will be those that can ensure a seamless experience in all fronts.