As the concept of store-specific pricing and promotion becomes standard strategy, will consumer-specific offers and prices become the next norm?

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Q&A Cross-Channel Retailing
Price And Promotion:
Consumer Specificity
On The Horizon?
As the concept of store-specific pricing and promotion becomes standard
strategy, will consumer-specific offers and prices become the next norm?
Marc Chriqui, president, Raymark by Matt Pillar
C
onsumer-specific offers are fun to talk about, but al philosophy and second, leveraging the data. If you have the
there aren’t many retailers widely or successfully data, you can analyze it to determine pricing performance
executing on the concept. Many still struggle with across stores, regions, channels, geographies, and categories.
the execution of store specificity in their price Once you have that visibility into specific products and their
and promotion plans. I talked with Marc Chriqui, president at performance, you can identify problems, issues, or opportuni-
Raymark, about best practices for store-level promotions and ties and make adjustments in different divisions, channels, geo-
opportunities for customer-specific engagement. graphies, and so on.
Store- and channel-specific pricing and If retailers are segmenting in a store-specific
promotions can be strategic, but they also manner now, are we headed toward customer-
create the potential for consumer confusion specific segmentation next? Who’s doing it well?
or frustration. How can retailers avoid this? The last few years have produced a tremendous leap, evi-
I agree that if you start doing things per store, you might cre- denced by companies like Amazon.com which is really
ate confusion. But there are strategies that are necessary and addressing its customers in a personal manner through the
advantageous. Location-based concepts are one example. If whole experience, including marketing and promotions.
your nearby competitor in a specific location is pricing a prod- Amazon.com has played a large role in steering the indus-
uct at $10 and you have to compete for that market share, you’ll try towards customer centricity. Zappos is another example;
likely want to respond. Retailers need to consider a situation its strategy is based on complete customer centricity.
like this one nuance of a larger global price and promotion phi- Customer service is unique there, and it has affected the
losophy — the empowerment of the store manager to respond top line of the business. These retailers have shown us that
to trends in a specific locale. This might mean adjusting pricing you must create a unified experience — you must homog-
to serve a demographic, to react to competition proximity, to enize the business through touch points to create a consis-
capitalize on the availability of product, or to manipulate stock tent view of and for the customer.
via inventory liquidation and sell-offs. As an overall concept, a BI (business intelligence) tools play an important role in
global price and promotion philosophy or strategy is a good establishing the KPIs (key performance indicators) that
idea, but empowering store managers is smart, too. help retailers align customer-specific price and promotion
You do have to be careful not to create confusion, and you strategies. Once these tools have helped you achieve under-
have to keep the strategy consistent and simple for the con- standing, it’s a matter of plugging in the operational tools
sumer to understand. But that doesn’t mean you should keep that align those strategies with day-to-day work.
hard-and-fast rules about a set price regardless of environment Some of our customers have employed these strategies
and channel. Each channel will have its own pricing strategy around personalized customer experience and seen a mea-
nuances based on volume and margin. Consumers will under- surable increase in customer loyalty. It’s also helped them
stand this, provided you’re careful not to create the impression become proactive at changing retail environments to suit
of inconsistent manipulation. Instead, create synergies for the specific demographics and customers. With the right tools
consumer and manage against letting different business struc- in place, you can leverage your intelligence to react to cus-
tures clutter the issue. tomers in real time at the store level, and at every category
The keys to avoiding potential confusion and maximizing and pricing level. There’s a really good return on engaging
sales by leveraging price and promotion are: first, having a glob- in customer centricity. ■
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44 RetailSolutionsOnline.com October 2010