To price or not to price

To price or not to price

To price or not to price, that is the question”. It sounds like a modern version of Hamlet, but this time spoken by a traditional retailer. And it is time for retailers to face change rather than run away from the consumer. We see it all the time, traditional brick and mortar furniture and mattress retailers not pricing products they carry on their websites. Their reasons are “obvious” (tongue in cheek) – but they are misguided.

During a presentation I was making at the Casual Conference in Chicago, I was discussing the steps retailers must take in their ongoing omnichannel journey. When I started to discuss having prices on the website – I noticed a growing murmur in the audience. Rather than continue – I asked quite openly; “I noticed that my last comment caused some side conversations; I would love to open that topic up for discussion”. A quick note – this was not my first rodeo on this topic – I wanted the latest and greatest from this group. The next 15 minutes was a pretty defining as it became clear to all the gap between a retailer’s mindset and the expectations of a consumer.

Before we dive in further – let’s hit pause and set the stage a bit by discussing a few basics of the customer journey. This level setting will allow this topic to hopefully inspire thought-provoking openness. Not guard up, gloves up let’s rumble retailer pride induced close-mindedness. Be a consumer. Consumer hat. Think about your last purchase (besides milk or gas). It is indisputable that most consumers (I would love to say all) begin their next purchase in some fashion online. Whether it is to browse, research, gain insight, validate range and wants and options; a mix of all and more. Consumers are information loaded more than they ever were. Its bold, its profound, and it is a reality. Certain channels and industries more than others – but it’s an undeniable fact. Let’s keep the consumer hat on – and focus on today’s topic. Price. If you are a consumer – doing your thing online; and come to a product on a website that you carefully navigated, and it doesn’t have a price – what do you do BOUNCE. And you bounced WAY quicker than I could type the word BOUNCE! If you don’t know what bounce is, in web terms it is to leave a page insanely fast due to its lack of delivering on its desired purpose (your purpose). A tidbit of extra uh oh – visitors usually bounce to another website.

Back to my audience in Chicago – Why don’t these traditional retailers show price on their websites. Using buckets – I broke down the audience commentary:

  • I’m going to get shopped (Fear of the competition winning in some way because they show their price)
  • I don’t’ do eCommerce (Ugh… save this one for last)
  • The products I sell range in price because they are custom (Retailers carrying special order or configurable products do pose a challenge when opting to show price on websites – think sofas with 1000’s of options and colors)
  • Resource (Time, I don’t have time)

Let’s break it down.

I’m going to get shopped. Almost always the number one answer. But I will ask a question and let you ponder. “Don’t most retailers traditionally advertise price (Print, T.V., Radio, Mail, Signage)? And you think that by not showing price on your website you are keeping this “hole card” secret. Unfortunately – my retail friend, there is no competitive advantage to not show price if you are worried about getting shopped. If you have a price, your competition knows whether you have it on your website or not; at least the good ones do. As for the consumer – you have lost more opportunities to have a shot at selling that item than you will lose in that last moment of being “shopped”. If 70% of consumers begin online in efforts to narrow their in-store visits based on online research and validation, and you fail the online piece due to lack of price transparency/visibility – you have already lost. Regardless if you have a 40×60 banner and free popcorn and pizza in-store. They chose someone else. (Consumers used to visit over 7 stores, now the average is like 1.3 stores. Knowledge is all powerful says the consumer).

The products I sell range in price because they are custom. This is a valid challenge and one to take advantage of with creative pricing solutions. Think about being a consumer. You pick a product based on a plethora of check-boxes including hard out of pocket cost! There is nothing more disheartening than falling in love and going in-store only to find a misalignment on price. Most times way more expensive than one can afford. Champagne taste – beer budget. It just does not sit well with consumer expectations. They politely scurry out of your store only to never return. Think about a huge cart of groceries and then only to find no method of payment after they spent 20 minutes ringing you up. Never going back to that store. If you are a retailer carrying special order type products, consider these approaches and language:

  • “Sofas starting at $$”
  • “Sofas from $999 to $1999” – “Sofas from $2000 to $2999”
  • “Configured for your style starting at $999”

What you are doing is validating a price zone. Replace “Sofas” with whatever products you carry. The consumer knows that this choice “fits” and this is a huge win when it comes to getting them closer to conversion. In furniture and mattress retail that conversion is most often happening in-store. Try this type of approach on all special order or custom products on your website. Even if you do not do not sell online! It works!

Resource. A challenge, absolutely. I believe most retailers have peeled back the labor layers so far – that there is negative capacity. No one ever has time for anything. The old working in your business vs. working on your business analogy. Quick run, someone called in sick or a truck just showed up. You know the drill. Last to happen is managing prices on your website. The best solve to this challenge is with technology. Throwing bodies at this problem is not the answer. You must have systems that are designed to serve omnichannel at a core level. Having a retail management system and then a website and then a kiosk and then this system and that system is not going to work long-term. Systems not talking is like putting all your star players on different fields with a can and string to communicate. If you change a price in-store, it should “just happen” on the website. Same with availability – by location. There are systems that do this without export-import manual exercises. Time to find one. Shameless plug – you need to have a retail management system that can be the heart and support all the consumer touch-points. Cough cough Retailsystem. (You should also read my post on knowing your differentiators. Pricing products online doesn’t need to happen en’mass. Put strategy and focus where you are strong)

Well I don’t do eCommerce. Turn out the lights, the party is over. I am NOT advocating that you need to do eCommerce, someday yes – today – probably not. HOWEVER, does the consumer care? I’ll make the case that you won’t even get to find out. Put on your consumer hat and follow my journey. You need a new table for your living room. Research coffee tables (probably Google on your mobile first). Find a few sites. Find styles, options, colors. Yep there it is… fantastic, and it is a price that is right. Oh shoot, they don’t sell online – that’s OK, they have it in-stock and they are down the road. I’ll have it tonight. Nothing paints this better than that example. Whether you “do eCommerce” or not – it is an expectation of the consumer that if you show products – you have price. Regardless of the “cart”.

To price or not to price is no longer a question. Consumers have answered it for you. Don’t ignore it, respect their wishes, get your arms around it and give yourself a shot at their next purchase. Your competition is.

Retail on!

Jesse