Retailers are feeling the pressure to meet the consumers’ demands of pricing and promotions amid a challenging economy.
A report by RELEX Solutions and Incisiv highlights the difficulty retailers have to navigate in the United States, UK, France, and Germany. It surveyed 179 retail executives and spotlighted the growing pressure on retailers and increasing price sensitivity. The majority of the survey respondents stated that price is a crucial factor in their purchasing decisions, and 87 percent of retailers used aggressive discounting strategies to maintain their sales volumes and customer loyalty.
The study established that promotions drove $1 trillion in sales in the year 2023. It stated that only 12 percent of retailers are using advanced, data-driven approaches to power their pricing and promotions, and without accurate, unified data, retailers cannot effectively optimize their promotional strategies. Moreover, retailers have turned to spreadsheets and legacy systems to drive execution.
Right Pricing
Jeff Bulger, Strategic Principal, RELEX Solutions, said consumers are now more aware of and motivated by prices than ever before. “Retailers must evolve their pricing strategies to not only respond to this demand but to lead with tools that are faster, smarter, and more integrated across their entire operation.” He pointed out that effective pricing is no longer an option, but a critical driver of customer loyalty and profitability in the present retail landscape.
Gaurav Pant, Chief Insights Officer at Incisiv, said driving $1 trillion in sales on the back of outdated analytics and technology platforms reflects the immense growth potential that’s possible. “The path forward isn’t just about technology – retailers also need to overcome cultural inertia and unlearn years of legacy behavior.”
Some of the recommendations that the report suggested include unifying pricing and promotions supported by automation, and optimized solutions. Data analytics and AI can be used to fine-tune pricing and promotions.
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