The ROI on Comprehensive Price Intelligence

By Alex and Er Rink

Staying Ahead of the Genie
The right comprehensive price intelligence service delivers return on investment through sustainable price programs that can result in significant increases in revenues — potentially in the order of 40 percent to 100 percent — while keeping margins steady or even increasing them. Research reports, company case studies and whitepapers support this significant ROI.

For example, a report from Retail Systems Research found that 50 percent of respondents increased gross margins in the face of a three-year sales decline when they were able to proactively control price and product mix. What's more, 24 percent kept gross margin steady despite decreased sales over the same three-year period. The foundation of an effective retail pricing program is access to complete and high-quality data.

In one case a national retailer realized it was losing market share in a major category. By using daily price intelligence, the retailer was able to get visibility on thousands of its products against multiple key competitors. The retailer not only verified that it was overpricing bargain items, but by precisely how much.

Further analysis revealed that the retailer’s premium products were underpriced, meaning lost margin and revenue. Since then, this retailer implemented a new level of price monitoring and control. The insights gleaned have led to the formulation of a new pricing strategy and tactics that have increased sales and margins.

Companies able to continually assess pricing and execute intelligent decisions that encourage pricing sustainability will adapt most successfully to changing market dynamics. As a result, they'll win new customers and/or increase overall share of wallet from their existing customers.

While smartphone-based comparison shopping apps and internet comparison shopping engines have provided shoppers with an unprecedented level of price transparency, retailers now have their own opportunity to respond. A comprehensive price intelligence service which integrates market, channel and competitive data with internal data in order to present actionable insights and initiatives to drive revenues and margins is worth the investment.

Alexander Rink is the CEO of Gazaro, a provider of price intelligence and analytics. Alexander can be reached at ceo@gazaro.com.