Martin

Small steps, but always forward: Strategy work with dynamic pricing online and in store

Martin

Martin Granberg is part of Martech24's permanent writing staff. He is considered one of the Nordic region's foremost experts on price optimization and price strategies. He works on a daily basis at Priceindx, which is one of our partners.

More and more chains and online stores are betting on more dynamic prices online and in store. Martin Granberg from Priceindx has many years of experience with this and shares his best tips for the best possible strategy process.

- "Would you be so kind as to tell me which way I should go?" - "It depends on where you want to go .

Some companies that are starting to work actively with their pricing strategy want a ready-made "out of the box" solution, where they can immediately get started. For those who may not have the opportunity or desire to invest the time it takes to delve deeper into strategy work, it is, for example, relatively easy to get started with simple market pricing by " scraping" the prices of selected competitors.

In practice, the reality is often somewhat different and much more complex, which means that many companies unfortunately offer their customers a much larger share of the margin than they would have needed if they had simplified their strategies.

Products react in different ways based on many dynamic variables such as competitors' prices and promotions, product options, brand strength, trends and, for example, the source of the traffic.

This means that the companies that have resources - and often have people who come from physical retail, where you are much more used to differentiating your pricing and working with different shopping baskets and personas - are often the ones that make a bigger investment in their strategies. Many times it also includes stores and purely organizational issues that dynamic pricing triggers, and which after a while tend to permeate entire organizations when different departments see the benefits.

"Which way should I go?"

This is a question that doesn't always have a simple answer, perhaps because you don't know, but also because it varies over time. To use a cliché that is very relevant, by eating the elephant in small pieces, one can gain a greater understanding and grasp of the whole. The purpose is often to start working with dynamic pricing by wanting to become more relevant in the market. Those who are good break the task down into smaller parts, as they do with any other larger project.

By breaking down the work and testing yourself, to see how different ranges and products react to price adjustments, you gain insight. The same product or brand will not react in the same way, even if there are two different actors doing the same thing. It depends on the individual customer groups and what the product mix looks like.

There is "best practice" for how to build an organization around the price function, how to group products and how to work with the big lines. But when you get to the point where you can start looking at details, you have to start answering the question of where you want to go, even if you don't always have the answer.

To make it concrete in three steps:

  • Measure and evaluate your present value position.
  • Set out the desired position per category based on overall investments and positions.
  • Test and adjust.

To summarize: work on your strategy, be curious, let the work take time and let time show where you want to go.

Read article at springboard.no

Contact us for a demo

Ready to discuss your profit and growth needs? Contact us today, and let's embark on a journey of excellence together.