Within the past decade, consumers and market changes have driven home a stern warning to retailers: change your strategy, or close your doors. Many big names like Toys ‘R’ Us, Gap, and JC Penney were forced to close down hundreds of stores or go completely out of business. This “retail apocalypse” had many retailers, particularly brick-and-mortar retailers, shaken to their core with the realization that they were no longer untouchable.
The struggle for these traditionally successful companies lies within their legacy; with eCommerce on the rise, competition is more fierce than ever. Consumers are able to compare prices easily and instantly to find the fairest deal. For retailers who haven’t adapted their pricing accordingly, revenue and sales losses are unavoidable.
Why is change so hard for retailers?
Change isn’t easy. For businesses, changing up how products are priced can be a huge risk. The process of pricing for traditional retailers is more art than science, based on experience and educated guesstimation with the limited data available to process by hand. No laboratory exists for testing out different product prices. New strategies that fail could lead to real and sometimes devastating losses.
JC Penney, for example, attempted to bring their pricing strategy to the modern age by switching from fake pricing and promotional pricing to more accurate and honest prices, only to find that their customer base did not respond well and their offers were less competitive than they thought. This led to their sales plummeting, adding more burden to their already struggling brand. With situations like this in mind, it is no wonder why traditional retailers stuck with whatever eCommerce pricing strategy they found successful and ran with it for decades.
This leaves many retailers stuck between a rock and a hard place. To stay successful, they must modernize their pricing strategy. But if attempting change can be so risky, what are businesses supposed to do?
Changing safely with pricing analysis software
In the new era of big data, retailers no longer have to guess where they are going in regards to their pricing strategy. With the use of advanced pricing analysis software, companies can adjust their product prices confidently. Serving as a GPS system of all things pricing, pricing analytics software uses countless data on market prices, products, promotions, and sales to guide retailers to the optimal prices for their goods. Using a fraction of the time as manual price analysis, pricing software allows retailers to change their prices as quickly as their market changes (which, in the age of eCommerce, is becoming increasingly more frequent) and can do so with high accuracy.
Instead of relying on experience and instinct, retailers using pricing analysis software rely on the cold, hard facts of big data. The switch to a more scientific approach to pricing drastically minimizes the risk involved in re-adjusting prices while giving retailers more room and freedom to adapt their strategy safely. Retailers of all types and sizes who use pricing analytics software have seen great success in doing so, reporting impressive sales and revenue increases and perhaps, more importantly, more confidence in implementing much-needed price changes.
Advanced pricing software is more necessary than ever
For retailers who have not yet grasped the importance of change to their outdated pricing strategy or the usefulness of pricing analytics software, time is limited. As the market continues to become more competitive and optimal prices become more important, pricing analysis software is becoming the industry standard.
Pricing analysis software may have been an advanced advantage for the early adopters who integrated it into their strategy a few years ago, minimizing risk and relieving the fear of failure that traditionally came with changing prices. In the near future, however, we can expect advanced pricing software to be a necessity for survival in this new age of retail.