Technology has proven to be both a curse and a blessing for small business. While social media, for example, allows even the smallest firms to engage in sophisticated, targeted marketing, mobile shopping technologies are proving to be the undoing of small firms that can’t compete on price. Retailers, however, don’t seem to realize what’s happening.
That’s the finding of new research that says easy access to price information, both online and through mobile apps, is exposing price discrepancies between retailers and even within a retailer’s own organization.
In response, most retailers have tried to create more targeted campaigns to focus on their core customers, according to the report by RSR Research.
"Price transparency has become an overnight issue for retailers," said Nikki Baird, managing partner at RSR Research and co-author of the report. "Four times as many retailers reported it as a business challenge this year over last year. When you couple that with consumer price sensitivity and increased price competitiveness in the industry overall, retailers are really struggling to avoid competing on price.”
"What’s ironic is that while retailers acknowledge price-sensitive consumers, they don’t ascribe it to anything in particular -- they especially don’t seem to be aware of consumer price comparisons, whether online or in stores," said Paula Rosenblum, the report’s co-author.
RSR makes five recommendations for how retailers can navigate consumer price transparency.
- Focus on targeted promotions;
- Develop policies and procedures for dealing with price conflicts;
- Re-evaluate promotion communications channels to avoid creating noticeable price conflicts;
- Do not focus on price in merchandising; and
- Help customers understand that this is "your price" versus "the price" by giving them reason beyond price to shop with you.