How the Delta Variant Should Affect Your Holiday Pricing Strategy
The biggest shopping months for retail are upon us. Many retailers think way ahead of time, many months in advance. It’s a good practice. But what if you re-evaluate your pricing strategy now, is it too late?
The short answer is no. It’s not too late; there's still time. In fact, it’s likely most retailers and e-commerce players already have the toolkit and skills to play the holiday game well. There’s a saying, one man’s trash is another man’s treasure. While COVID-19 gave us all a kick in the behind and humbled us in more ways than we can imagine, the survival game for retail during the holiday season has to do with how you played during the pandemic. It’s about a different mindset.
For example, retail has gone through so many tests and continues to do so, with labor challenges, global shipping roadblocks, and more. You can either take what bit you and nurse the pain, or you can get up and move on.
The last 18 months have shown the retail community that as long as you have a smart reflection of what was learned, Delta, Lambda or any other variant shouldn’t get in the way your pricing strategy moving forward. Let’s take a look back memory lane and put a stake in the ground on what retail should do this holiday season.
Stretch and Flex Often, and Repeat
Retail and e-commerce should allow flexibility to have pricing decisions structured at multiple levels. The why is simple. Competitors are constantly changing prices, often multiple times a day. This is in response to a myriad of minute-by-minute market movements. The harsh reality is that this is the real world and retailers need to be prepared and act in real time.
Supply chain and labor constraints will surely have a ripple effect this year, which could (and should) impact pricing. Based upon where you sit with these two conditions, adjusting pricing, either up or down, it may make a big difference in how successful you are this holiday season. A few retailers I’ve talked to are ready to reduce or even remove promotions for items in which they get shorted. Others mentioned taking clearance markdowns deeper and earlier if the highly seasonal goods they ordered are late and miss peak sales periods.
Avoid Unnecessary Holiday Weight and Consume the Right Data
Today, your own product and customer data isn't enough. The market is now much more transparent than before and retailers need to be connected to multiple internal and external data sources to keep up, stay competitive and remain relevant. Those data sources are constantly growing and need to be supplemented by competitors’ pricing, index prices, real-time exchange rates, index prices, and more. You better believe that even local weather data is part of the equation.
To make better decisions, it’s critical for retailers to obtain data in a way that can easily be consumed and understood. Tools and strategies should be put into place that prioritize good customer insights, extra cost data, actual historical data, alongside real-time inventory data. Those external sources should keep track of inventory, price segments, market share and bi-directional data.
Pricing Will and Should Fluctuate, So Roll With it
Find a strategy in which pricing solves problems and continuously look at how the landscape changes, enabling your business to make decisions accordingly.
Start discussing contingency plans related to pricing now if you haven’t begun already. Retail is reaction, probably always will be, but working through roles and communication protocols will simplify the execution for your team.
John Gilbo is an enterprise account executive at Pricefx, a cloud-based pricing software provider.