Retailer Price Management: Leaving Customers Behind?

Recently, there was an article from the AP in the Ashville Citizen-Times that stopped me in my tracks. It was a retail focused piece that described how e-commerce sites have been working on and implementing price monitoring systems for the past few years. This isn’t anything new, considering that retail has secret shoppers (humans) that search out competitors, visit stores, and report on prices, displays, selection, and more. Now, they are going into hyper-speed online. How? By using systems that will change prices online based on a competitors online price, current inventory, and the company’s bottom line.

Some people have said ‘What’s the big deal, Kristina? Isn’t that what businesses have been doing for as long as retail can remember?’ To that, I say ‘Of course’. However, last time I checked my Aunt didn’t search and purchase at stock exchange speed. Ok, maybe the sites aren’t that fast, but they are getting closer.

The pricing systems, according to this article, for many large corporations, like Amazon and Wal-Mart, now have the pricing structure so they are able to change prices in minutes. For customers, that means that you can check a price, comeback an hour later, and it’s changed. From a business perspective, to change prices based on the market, bottom line, and several other factors, that can seem like a dream come true. But I have to ask, what about customers? I believe that some companies do factor in the customer’s need for consistent, yet competitve pricing. But from a customer’s perspective, competitive means lowering prices, not yo-yo-ing them up and down.

The airline industry has been doing this for ages. We are used to price fluctuation now for airlines and think we have it figured it all out. However, we all know that it’s still a gamble with those airline tickets to go see Grandma for her birthday or mom and dad for Christmas break from college.

When it comes to retail, customers like to do their homework, but will that even be possible to do that with a minute-by-minute price changes?

Perhaps, with tools that compare online retail pricing. They aren’t as well known as their airfare counterparts like Kayak and Expedia for example, but they are out there.

Enter Pricegrabber.

Pricegrabber.com compares prices for retail products from toys to TVs. This is wonderful when you consider all of the purchase options that are out there and how exhausting it can be to surf  all the major retailers for the Christmas toys, for example— not that I have a 2 year-old to shop for.

One thing I noticed while being on Pricegrabber, was that there is definitely a time delay on price changes. I looked for a big ticket toy (a play kitchen) and Pricegrabber said it was $129.99 at Target, but when I searched on Target.com, I saw it was $125.99.

Now, that’s not a huge difference, and in about 1.5 hours, Pricegrabber was updated, but I’m not sure how often these competitors websites are crawled and updated.

I am hoping that retail doesn’t 100% go the way of airfare online. It’s one thing to be competitive, but it is another to constantly change prices so often that by the time you get your credit card out of your wallet to make a purchase, the price has gone up.

Finally, me purchasing a $50 is NOT the same as making a$1,230 investment in a first-class plane ticket. If we don’t have consistency in pricing, I think we could easily see more skeptical customers that already doubt pricing anywhere they go. Big box stores say there is room for no negotiation on prices, but with these online systems changing by the hour (or minute), customers will be calling BS very soon.

Oh, and don’t even get me started on how this could RUIN brand loyalty.