Thought Leaders in Big Data: Keith Anderson, VP Strategy of Profitero (Part 4)

Keith Anderson: Prices are really a key driver of that ultimate decision to buy from one retailer versus another. The manufacturers of course are wary of deflation. They don’t want a race to the bottom. They introduce policies like minimum advertised price (MAP). MAP policy is a policy that retailers and manufacturers enter into voluntarily. It often has implications or willingness to partner on promotions or programs. If you’re a retailer, you want to make sure that you are giving shoppers the best price you can realistically give, but you don’t want to violate the agreement you have with your suppliers. So you start adding capabilities like, “We’ll show you the price after you add the product to the cart, after you sign in, after you pick a shipping option, and after you fill out a CAPTCHA.” Those increasingly complex steps are both to make it difficult for brands to claim that the retailers violated that policy but also to make it more difficult for technologies like ours to monitor the actual price to the shopper.

It’s just been entertaining to watch these tactics even in the few months of 2015. There are new tactics that we see every month that make this cat-and-mouse game more and more complex. I think the other interesting development from a pricing perspective is this big idea of price personalization, which isn’t happening exactly the way that people expected that it might. There isn’t necessarily discrimination at the shelf price level to individuals, but there’s a lot that’s happening in the adjacent areas of loyalty programs and price promotions that’s definitely changing the way retailers and manufacturers think about pricing.

There’s some really interesting experiments under way that you could probably describe as price personalization. In a brick-and-mortar store, there’s digital shelf signage that might display a unique promotion to me. If the retailer knows that I’ve been buying diapers, they might show me a diaper coupons. If you’ve been buying something else, they may show you another coupon. In a sense, there’s some personalized pricing there. It’s got to be driven really fairly and equitably.

This segment is part 4 in the series : Thought Leaders in Big Data: Keith Anderson, VP Strategy of Profitero
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