Feature: The Price is Right
The Omnichannel Conundrum
Retailers, especially omnichannel retailers, face a conundrum: Should they price a product the same online and in-store?
If they do align prices and find they aren't price competitive online and need to make a change, it can be a nightmare to change prices in-store, especially if the pace of change is constant. If a company tries to deal with the problem by offering to match their own online prices or that of their online competitors, it creates another set of complications and it will start down the path of matching the lowest competitor. Price matching the lowest competitor is often a losing strategy, as most online retailers don't have the fixed costs that brick-and-mortar retailers have.
Many retailers have been caught unprepared to deal with the new era of dynamic pricing. It's a complex problem and there are no easy answers. Technology alone won't solve the problem. Dynamic pricing in today's retail world requires strategic thinking and decision making. Many retailers understand price optimization for brick-and-mortar stores, yet they automatically match their online prices with their in-store prices — which could, in fact, be a very flawed strategy.
Price matching in any form is universally viewed as a victory for consumers. For retailers, however, it's at best a cosmetic bandage that ignores deep wounds below the surface. For that matter, if brands are selling products online and in-store at the same price, they're issuing hundreds or thousands of price changes in-store every day. There's no retailer on the planet that has enough labor to manage hundreds or thousands of price changes every day, so there will always be a difference between online and offline pricing — at least until networked electronic shelf labels become ubiquitous. Even if retailers could spend the time to match prices, the question remains: Should they?