Miami—JCPenney’s new “everyday low pricing” strategy continues to be controversial and the jury is still out on when, or even how long, it may take to see concrete results.
Yet according to its 2012 Benchmark Report, “Retail Pricing in a Post-Channel World: Benchmark 2012“, Retail Systems Research (RSR) most retailers are still struggling with consumers’ price sensitivity and hence are increasing the number of promotions. And complicating matters, is the cross-channel transparency, thanks to consumers’ increased use of Internet and mobile access to comparison shop.
“Retailers have opted to become more promotion-oriented than ever. Rather than treating price as ‘table stakes’, retailers have instead engaged in a new ‘race to the bottom,” report Nikki Baird and Paula Rosenblum, RSR Managing Partners and the report’s authors. “Few of our retail respondents characterize their pricing strategy as ‘hyper-promotional,’ but they continue to ramp up the number of price changes they send to stores and other channels.”
The report, based on a survey of 70 retailers on their pricing challenges, opportunities, and technology adoption plans, had several interesting key findings:
- 34% of retail respondents report that their zone pricing plans have been damaged by consumer price transparency and 21% report that they have returned to one price across channels—twice as many as in the 2011 report.
- 40% of retail respondents, down just slightly from 2011, still report that they “haven’t seen it yet” in response to questions about showrooming (where consumers shop brick and mortar stores only to actually buy a lower price elsewhere online).
- 41% of retailers report they are not able to execute at the level of granularity that pricing solutions provide, a three-fold increase over 2011.
- Retailer’s highest investment priorities for 2012/13 include markdown planning and forecasting, followed by end-to-end pricing lifecycle management.
“Retail Pricing in a Post-Channel World: Benchmark 2012″ contains analysis of the business drivers, opportunities, and organizational constraints surrounding retail price strategies. It also offers up baseline recommendations for successful price planning and management.
The report is part of RSR Research’s efforts to provide market intelligence on retail technology trends, is sponsored by Predictix and Revionics, and can be downloaded here:
www.rsrresearch.com/2012/04/10/retail-pricing-in-a-post-channel-world-benchmark-report-2012/
About RSR Research
Retail Systems Research is a research company run by retailers for the retail industry. RSR provides insight into business and technology challenges facing the extended retail industry, and thought leadership and advice on navigating these challenges for specific companies and the industry at large. RSR’s services include benchmark reports covering the state of retailer technology adoption for topics ranging from merchandising and supply chain, store operations and workforce management, to customer-facing and multi-channel technologies. www.rsrresearch.com.
