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While traditionally a time-consuming and costly endeavor, competitive pricing intelligence is set to undergo a radical transformation thanks to the advancement of retail technologies and software services. Grocers, in particular, are on the brink of a new era of business improvement, with pricing intelligence integrated into every aspect from customer attraction and product differentiation to profit margin optimization and promotion timing.
As heralded by the FMI – Food Industry Association in its 2023 “The Food Retailing Industry Speaks” report, grocery retailers are honing in on competitive pricing and amplifying value to drive traffic and loyalty. Technology will make it possible.
Here are five areas where competitive pricing technology will yield a significant impact in 2024:
Customer attraction and retention
Understanding the pricing strategies of competitors will allow smaller grocery stores to set prices that attract and retain customers. By offering competitive prices on popular items in the face of inflation impact, the store can entice shoppers to choose their establishment over big box competition.
Product assortment and differentiation
At the forefront of this intel-revolution stand independent grocers, uniquely poised to shine by offering localized products at compelling prices while delivering an unparalleled customer experience. This is an area ripe with opportunity for independent grocers who traditionally outperform their big box competitors through product differentiation across fresh foods, deli and specialty items. Competitive pricing knowledge will help them identify competitor price points and refine their assortments to suit the evolving preferences of their clientele.
Promotions and discounts
Awareness of competitor promotions and discounts allow community grocery stores to create timed and targeted effective marketing campaigns. Grocers will be better positioned to respond to competitor deals, offering their customers comparable savings on national brands and building loyalty for private labels. FMI notes that about 65 percent of grocers surveyed said they’re emphasizing high-low pricing, everyday low pricing and other price differentiation.
Profit margin optimization
Competitive pricing knowledge will enable operators to make informed decisions about pricing and profit margins. They can identify opportunities to adjust prices for better profitability without losing competitiveness, ensuring the business remains financially viable. As with any developing technology, the keys will be data accuracy and real-time precision, with access to store-specific street-level information. By gaining access to big box “store next door” intel, independent grocers will be able to respond instantaneously with price adjustments.
Inventory management
With insights into competitor pricing, grocery stores will fine tune their inventory management strategies, adapting to changing consumer habits and price fluctuations. Independent grocers will be more positioned to plan for sales events by quickly adjusting sale prices to fit their local area when they discover a competitor is running a similar promotion. They will highlight local specialty items that competitors do not carry, and optimize stock levels to minimize the risk of overstocking or running out of popular items.
“Independent grocers should have the same access to competitive pricing as big box stores and CPGs currently enjoy. With PriceFind, Storewise has leveled the playing field for independents. While we wait for Congress to enforce antitrust laws that will stop unfair, discriminatory pricing practices, Storewise will continue to innovate, delivering software solely for independents. It’s the job of technology providers to make technology as simple and efficient as possible,” said Christopher Greco, president and CEO of retail technology platform Storewise, regarding the recent unveiling of its PriceFind competitive pricing tool. Greco further addresses the impact of competitive pricing on grocers in an open letter to the industry.
Competitive pricing technology is poised to be one of the most powerful drivers of change in the grocery retail space, with the potential to help independent grocers make strategic decisions that cater to customer needs, enhance customer satisfaction and maintain a healthy position in the market.
Discover more about PriceFind technology from Storewise.
