Grocery retail is an industry that sees constant scrambling for matching and competitive prices among the players. Every one is continually on the look out for ways to get ahead of the others. Amid such cut-throat competition a poor strategy can lead to missed opportunities and, in turn, adversely impact business both customer and money wise.
The grocery industry has currently become extremely competitive. The primary focus for the players is retaining key customers and strategically shifting out of the same pricing window as the others. For example, if one retailer reduces the price of oil to Rs. 99, typically, the competition will reduce their price to Rs.95 and so on. This pricing game is going to continue this way as long as there is transparency in retailers pricing. But what if there was a way to allure customers through pricing that is not directly visible to competitors?
With the help of personalized pricing strategies, retailers can develop individualized pricing for specific customers, key segments and key markets instead of following the other players in the same competitive race. Using these strategies retailers can optimize where and for what the key customers care the most.
There is thorough analysis done on individual customer insights to find out where most shoppers place their values, requirements and behaviours both in store and online. These analytical insights are useful in identifying which customers are willing to pay more for a specific type of product and which customers would buy if the price were lower. A recent study by LoyaltyOne found that 78% of shoppers in Canada would pay more for a superior quality product that was significant to their needs and values.
Currently it is the best time to make an investment in pricing – a smart investment. Bad investments in price, more often than not, lead to lost sales and profits, which can be really hard to get back. This can result in the market share and customer loyalty taking a huge hit. Smart investments at the right prices on the right products for the right customers can produce a sustained 1-3% increase in sales and profits as well as build price perception and customer loyalty towards the brand.
It is apparent that the future of grocery is transforming from the conventional approach of straight competitive pricing and price-matching to strategic, customer-focused pricing strategies and investments. This strategic approach towards pricing and commitment towards the customer will reap rewards for many years to come.