Retail has changed drastically over the past few years. While pricing has always been critical to retail and customer goods (CG) businesses, recent supply chain volatility and inflation have created major challenges when it comes to managing margins.
In fact, global research from Flintfox and advisory firm Forrester revealed that 39 per cent of businesses were unable to keep up with the scale of real-time price fluctuations occurring in the market. “Rising costs to business pose a huge risk when they are not being carefully factored into pricing in good time,” says Cath Brands, chief innovation and marketing officer at Flintfox.
This is exacerbated by the fact that retailers and CG businesses are using disparate and disjointed data sets to make their pricing decisions. “Global supply chains have become so much more complex, and many businesses are using legacy and manual processes that can no longer accurately manage the volume of data and the rapid changes to costs,” says Brands.
These outdated systems can have dramatic effects on a company’s ability to compete in the market. “Managing complex and disjointed pricing data sets is time consuming and month-end cost analysis doesn’t give businesses the agility to respond to sudden changes,” says Brands.
And businesses know this. Flintfox’s research showed that 60 per cent were aware that poor data quality was hampering their ability to remain competitive.
Flintfox is helping though. “We are simplifying complex pricing processes by bringing multiple elements into one solution that breaks down channel silos, manages and automates incentives and promotional structures, and provides complete profit visibility in real time,” says Brands.
“Our role is to help retailers and manufacturers execute all elements of their pricing strategies, no matter how complex. We can take thousands of data sets and serve up to 5,000 prices per second, expertly calibrated to deliver the margin needed.”
Brands explains this approach as intelligent pricing, but many businesses may be wary of the impact of blunt price rises on their customers.
“Intelligent pricing means recognising which products can absorb some cost increase, which need to be maintained to protect the customer base and where gains can be achieved,” says Brands. “Through pricing automation, businesses can identify adjustment opportunities that might not otherwise be seen through manual analysis – we call it ‘finding magic in the margins’.
“By enabling our customers to make informed and smart pricing decisions, they’re better able to weather turbulence and will be in a strong position when more stable times come.”
This article was originally published in the Summer 2022 issue of Technology Record. To get future issues delivered directly to your inbox, sign up for a free subscription.
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