Sponsored by Datasembly
Food brands and retailers are experiencing substantial cost increases — for everything from commodities to transportation — leading to higher prices at grocery stores.
Grappling with food inflation is the latest challenge for grocers after a dramatic year of working to ensure ample product supply for shoppers. For many consumers, obtaining product during the COVID-19 pandemic became more important than shopping for price. That likely won’t be the case going forward as the economy opens up and price hikes become more pronounced.
Consumers encountering higher food prices will increasingly shop around. Retailers will need to be on top of their pricing games and monitor competitive activity to succeed across their markets.
How Grocers Run Into Problems
Too often grocers don’t pursue high-level price optimization approaches. Many create uniform pricing strategies for wide geographic areas — even for an entire chain.
How do you know when a pricing strategy is problematic? Here’s a clear-cut example. If a 50-store chain operates with a single pricing zone that isn’t updated regularly, it is practically inviting competitors to take over its business. But even having multiple zones won’t help unless they are built and run strategically.
The upshot is that grocers need to improve pricing approaches — especially now. They need to raise their capabilities for monitoring competitor pricing and create multiple price zones that reflect the competitive realities in each one. This isn’t possible without the ability to obtain extensive, real-time data using an advanced technology platform.
Five Keys to Achieving Success
Food retailers don’t need a technology degree to succeed, but they do need to understand some key imperatives:
Here are five in particular:
- Think Local: Supermarkets wisely play up local products as an important trend. Local is also crucial for setting price strategies. Price zones should be built around the nearest competitors to provide insights related to each zone and specific stores within it.
- Don’t Skimp on Data: Extensive amounts of pricing and promotions data need to be collected from every competitor in each zone — in order to make informed decisions.
- Focus on KVIs: Data collection needs to especially focus on key/known value items (KVIs) — because these have the biggest impact on shopper perceptions. Having this competitive intelligence enables a retailer to make strategic moves.
- Monitor in Real-Time: Working with outdated information is like looking in a rear-view mirror. Retailers need to gather real-time pricing and promotions data from each store across each zone, to enable effective decision-making.
- Leverage Technology: The scale of competitive pricing data needed today is well beyond what humans are capable of gathering. Retailers need to work with a technology partner that can collect massive amounts of information and quickly translate it into actionable insights that are customizable and easy to use.
Datasembly uses an advanced proprietary technology platform to gather hyper-local, real-time competitive intelligence about prices, promotions and assortments from brick-and-mortar and online stores. Billions of product observations a day are organized and provided via tools, dashboards, alerts, and visualizations. Retailers use Datasembly to tailor pricing strategies for individual trading areas. The result is better pricing and promotions and increased revenue and profits.
Relying on more sophisticated pricing tools is the best route to achieving continuous improvement, retaining shoppers and advancing profits — regardless of the price landscape.