Price experts' verdict on Black Week: "Many are nervous – no one is doing very well"
First a total desert for a month – then everyone will sell everything during a week of wild price war. In an interview with Market, pricing experts Jan Tallroth and Martin Granberg criticize the retail industry's handling of Black Week, and give their views on how companies need to work on their pricing.
Read more:
- How to be competitive – and profitable
- Common tricks for beating your competitors' e-commerce
- How to organize your pricing – with ONE general
- The manager who shouldn't have power over prices: "That's when the margin crashes"
- The future – with dynamic prices in physical stores
There is a story about when Curt Luks, founder of the pricing company Priceindx, was visiting a potential customer in the UK about 15 years ago.
In one of the rooms, there was a large group of people. The British manager, who guided the Swedish delegation around, explained that their job was to keep an eye on the retailers and how they priced the company's products.
“Then they can go home now,” Curt is said to have said.
This was during a time when it was a comprehensive job to get an overview of the players' prices in the trade. Brands did not want their products to be sold too cheaply by retailers, and the stores wanted to make sure that they had purchased their products at the right price in relation to their competitors – and thus could resell them with the right margin.
Everyone put a lot of effort into checking that the deviations were not too large among other players in the industry. The work was manual, employees called around anonymously and asked for prices in different stores.
- It was a hand-hunting like no other, says Jan Tallroth, the former advertising executive who joined Priceindx as chief growth officer in 2018.
By then, Priceindx had been running for just over ten years. The business had shifted focus – from primarily offering manufacturers a flexible service for checking retailers' pricing, to focusing more on helping e-tailers set the right prices in relation to their competitors.
Five trends for the future of pricing
In early 2025, management consulting firm BCG released a report in which they identified five trends that will be crucial to how well companies succeed with their pricing strategies.
Artificial intelligence and generative AI
Advanced pricing may soon become impossible without AI and generative AI for in-depth analysis, recommendations and communication.
Price volatility
The risk remains that prices can fluctuate sharply and unexpectedly. Companies must be flexible and vigilant in order to be able to make quick price adjustments.
Dynamic pricing
Adjusting price and value in line with changing market factors only succeeds if there is a compelling value story and continuous human guidance to guide the algorithms.
Sustainability
Consumer behavior is a wild card, as they focus on benefits such as health and safety – not just the environment.
Fairness
Prices are fairest when a company sets them in proportion to the value customers perceive. This mindset protects companies from decisions that could expose them to risks.
Jan Tallroth continues:
– Some may choose to simply knock out a competitor who is really strong in a certain segment. Then you dump the prices right there, to win the deal and get the customers into your customer register.
The most common is to place yourself close to the closest competitors – and let the “garage sellers” run wild if they offer significantly lower prices.
– Almost no one places themselves at the bottom in terms of price. Everyone wants to make money. So you often choose to be the same or slightly above a number of selected competitors.
If you have credibility in the brand, good customer service, an attractive range and reliable deliveries, you will win customers anyway.
– The price is an important factor, but everything else is also crucial.
Through the price checks, Priceindx can also collect information about the competitors' range.
– We can provide lists of products that competitors have but that the retailer lacks. This is popular with buyers or those who create their own branded products, since we also measure comparable products. Before entering a new market, you can do this exercise and see in a week how you should be in terms of price and thus margin.
A problem today, according to Tallroth, is that marketing managers are allowed to decide to launch campaigns where customers get a 20 percent discount on everything in their shopping cart.
– Then you risk crashing the margin.
This particular issue of the different roles in the company – and who should be in charge of pricing issues – is a challenge, according to Tallroth and Granberg.
Companies are often organized into departments that pull in different directions when it comes to pricing. No one has full control and unprofitable campaigns risk eroding profits.
– Someone wants prices to be set based on a predetermined margin. Someone is a product manager and wants the company to be king of a particular product range. Someone is a marketing manager and wants the company to be known for maintaining a certain general price level, and so on, says Jan Tallroth.
What is needed is a “pricing team” that is given full freedom and decision-making power over pricing. Here, people from several departments – marketing, product range, sales – can come together to build a holistic view.
– If you move the mandate and management to a team, you can gain control from the start, says Martin Granberg, and continues:
– You still need to do campaigns. But it is in the combination of campaigns on certain brands – where you have support from suppliers – and dynamic pricing on other products that you get all the margins.
Hot sales weeks in retail, such as Black Week, can be particularly difficult for companies that work according to a more traditional approach, according to Priceindex managers.
– You first have a price that you have to hold for 30 days, and during that period you get dramatically fewer deals. Then suddenly you lower it by 25 percent. That means you then have to take back all the sales in a period when everyone is in a price war at the same time, says Jan Tallroth, and continues:
– Everyone does the same thing. They lock in prices in October and sell nothing. Then everyone has to have campaigns at the same time and sell everything. Many are nervous out there. No one will succeed very well.
The solution is balance, according to the pricing experts. Only then can you become both competitive and profitable.
– You need to combine dynamic prices and strategic campaigns, without compromising margins. Choose early on which assortment will be under campaign and which will be dynamically priced, says Martin Granberg.
Today, Priceindex works with around 120 retail companies in Northern Europe. In 2023, sales amounted to SEK 23 million, a couple of million up from the previous year, and operating profit landed at just under SEK 600,000.
The company is currently targeting more markets, under new CEO Kim Schiöld, former CEO of the AI company Qualifier.ai. At the same time, the technology is being developed, including by integrating with digital price signs in physical stores.
– Previously, we sent out new price lists every morning to stores. Now we can send the new prices all the way to the shelf, says Jan Tallroth.
He envisions a development where the shelf label is equipped with RFID transmitters that detect which customer, equipped with a mobile phone, is moving around the store. For example, customer club prices can then be pushed out to the right people.
– Our research and development department gets help from forward-thinking customers who are open to new solutions, an interaction that works well when we solve challenges together.
The possibilities of technology to automate pricing work have meant that several companies in the area have popped up. In addition to Priceindx, there are Reprice, Danish Priceshape, and Stockholm-based Pricegain.
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