Outsmarting the Supermarkets
In today’s economy, supermarket giants have all the advantages. They can make bulk purchasing deals to get lower prices from suppliers, and they use their size and scale to drive down consumer costs. Unlike most other retailers, supermarket giants have entire departments of employees dedicated to analyzing pricing data. So how can an independent retailer hope to compete and create a winning retail pricing strategy?
Fortunately, there are a few things that the big supermarkets can’t do that you can. Namely, you can be intimate and personal with your customers. You know their names, their faces, and their shopping habits. You know what they like and don’t like, and you can use that information to your advantage regarding pricing. Intrics is the newest development from RetailData, which has monitored retail pricing from stores across the country for over 30 years and used our expertise to advise retailers on optimizing their pricing strategies—so we’ve learned what winning retailers do to stand apart from the crowd.
So, here are five steps to creating a winning retail pricing strategy:
1. Understand Your Customers.
This may seem like a no-brainer, but it’s more important than ever in today’s data-driven world. The supermarkets have teams of analysts who pore over data points to come up with micro-targeted pricing strategies. If you want to compete, you need to be able to match them—and that starts with knowing your customers as well as they do.
2. Constantly Monitor the Competition.
To stay ahead of the curve, you must constantly monitor what your competitors are doing—especially the supermarkets. One way to do this is by signing up for your competitors’ loyalty programs, checking their websites and app frequently, and downloading their mobile app so you can get push notifications whenever they change prices on items in your store. This way, you’ll always know what’s going on with their pricing strategy—and you can adjust yours accordingly.
3. Use Price as a Strategic Lever.
All retailers must strike a delicate balance when pricing: charge too little, and you’ll go out of business; charge too much, and your customers will take their business elsewhere. To find the sweet spot, you need to understand what your customers are willing to pay for each item in your store—and then price accordingly. This is where relationships come in handy; if you have a good relationship with your customers, they’re more likely to trust you regarding prices.
4. Use Technology to Your Advantage.
At Intrics, we collect pricing data from retailers around the country to provide users with immediate, actionable insights into what their competitors are doing. Using our platform allows you to quickly check prices on items before making decisions about your pricing strategy, including comparing how your prices index against your leading competitors in your unique market. Once you’ve identified the products and competitors you want to track, our tool allows you to set alerts whenever your competitors make significant pricing changes or promotions, making this step as fast and straightforward as possible.
In addition, consider investing in point-of-sale (POS) software for your store to track sales data and refine your prices based on demand patterns and tracking competitive pricing.
5. Be flexible and adaptable.
In today’s retail landscape, one thing is sure: things are constantly changing—and your pricing strategy needs to be flexible enough to change with them! Keep an open mind when reevaluating your prices. Be willing to experiment until you find the best method for your business and customers.
The supermarket giants might seem like they have all the advantages when it comes to pricing, but there are still things that retailers can do to compete. Namely, being intelligent, nimble, and agile! If you want to create a winning pricing strategy for your store, start by following these five steps: 1) Understand your Customers; 2) Constantly Monitor the Competition; 3) Use Price as a Strategic Lever; 4) Use Technology to Your Advantage; 5) Be Flexible and Adaptable!
Intrics provides insights and clarity by analyzing over 100 million price changes weekly from top retailers in every market of the United States. By considering national brands and private-label alike and linking disparate SKUs and descriptions to a single UPC, Intrics provides product-level indexes in your market. This allows you to be the first to react by quickly understanding changes to product prices, whether your competitors are absorbing or forwarding increased costs to consumers, and how your prices and price changes compare to theirs.