Retail Customer experience & the impact of single pricing
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When shoppers in the UK realised that retail giant Marks and Spencer was charging different prices for goods bought in-store to those purchased through its online delivery arm, Ocado, there was anger and outrage. Customers took to social media to vent their frustration about price differentials of up to 40%, and the confusion of some items being more expensive online than in-store, and vice versa. For a retailer that has enjoyed an enviably strong reputation with the shopping public, this retail customer experience was a big blow to its reputation.
This is just one example of the dangers of retailers hanging on to notion of different pricing across different channels, and how strongly today’s shoppers demand the same price however they shop.
iVend helps retailers implement single pricing strategies.
Learn more about how we’re enabling omnichannel integration.
Blurred lines
Unlike the days when online was seen as separate to the store, shoppers in 2022 are ‘channel-blind’– they see themselves shopping with a brand, not through a channel. The world of omnichannel retailing has blurred the lines between online and brick and mortar shopping, especially with the massive growth of cross-channel transactions such as Click and Collect/BOPIS, Curbside Pickup and Buy Online Return in Store (BORIS). This lack of distinction between channels means that shoppers expect the same pricing, no matter how they transact.
The danger of having different prices online and in-store is that it’s a strategy guaranteed to undermine the retail customer experience and destroy trust between retailer and shopper. Moreover, research from the Harvard Business School shows that standardising prices is highly beneficial to a retailer – not only does it make for a positive retail experience and trusted relationship but it brings financial benefits too.
Costs and opportunity
The traditional argument from some retailers for having lower online prices is that it is simply a reflection of the fact that their costs are lower for ecommerce channels and that they are passing on to their customer the higher cost of brick and mortar trading. But what this doesn’t take into account is the fact that brick and mortar also brings with it greater opportunity for cross sell up sell. Research clearly points to the fact that, once in store, shoppers spend more.
Above all though, it is clear that consumers expect and respond positively to a single pricing strategy, and that to do anything else risks a retailer damaging their reputation and losing market share and sales. Winning shoppers’ hearts and minds is all about the retail experience, and anything that adds complexity or friction chips away at that experience. Comparing prices and asking for price matches is a source of friction, and one that today’s shoppers simply aren’t willing to tolerate.
The need for online/offline integration
If consumers are channel-blind, retailers must be channel-integrated. They need to ensure that they are offering not only the same prices, but the same retail experience no matter how the consumer chooses to shop – online, offline, or a transaction that combines both channels. When it comes to putting this strategy into practice, the right retail technology is an essential enabler.
The tech behind integration
So what should retailers look for when selecting a retail technology platform to enable online/offline integration for a superior retail customer experience? The key is Master Data – having a system that allows them to have a ‘single source of truth’ with key operational data shared between online and offline channels for a seamless single brand customer experience. Master Data applies to pricing of course, but also to other key customer touch points that deliver a frictionless cross-channel customer experience.
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Pricing data – if retailers are to have a single price strategy, it’s essential that their retail technology platform enables them to operate with a master pricing file.
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Manage inventory in one place – offering the same goods at the same price across channels means that retailers need a single stock pool, with full inventory visibility across products in stores, warehouses and distribution centres.
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Loyalty – along with the same goods and prices, a positive retail experience means that retailers have to be able to recognise a customer no matter how they shop. Loyalty programs must operate across platforms, meaning that there is a single master source of customer and loyalty data.
The right retail technology, offering the ability to hold a single source of master data, which can be shared between ecommerce and brick and mortar stores, enables retailers to offer customers the same price, stock and loyalty program across all channels, and deliver a positive retail customer experience.
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