3 pricing and promotion challenges in unified commerce

Dec 06, 2023

Key takeaways

Many retailers set an expectation of having the same pricing across channels. This is a difficult expectation to meet

Many retailers operate on different unaligned systems for online and in-store sales

The disconnect between systems creates serious obstacles for retailers and potential frictions for customers

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Many retailers advertise the same prices online and in store, which sets an expectation with customers that is often difficult to meet. This friction between capability and brand expectation requires significant resources to overcome. Retailers have an opportunity to capture value and improve the customer experience by addressing this issue.

No. 1. Customer expectations for same price

In most cases now, online prices are no longer different than in-store ones, except for heavy or difficult-to-ship items due to packing and shipping fees. Customers also expect that pricing and promotions offered online would be available in store. This expectation is met somewhat on a gambit: most transactions originating online will not be touched or updated in a store system and vice versa. This is further mitigated by special returns processes in store for online orders. On paper, this policy seems reasonable; however, mistakes are frequent, and these experiences damage the brand and lower the customer experience. 

No. 2. Difficult to manage pricing and promotions in multiple systems

The single largest cost of keeping pricing and promotions the same is the effort required to maintain this policy across multiple systems that are not aligned. Differences in capabilities between systems result in the lowest common capabilities being implemented. This compromise hampers the ability for marketing teams to influence customer buying behavior. Once the compromise has been made, there is still the issue of keeping each of the front-end systems in sync with each other. Timing issues, problems with interfaces and the sheer volume of data combinations set the stage for frequent errors. To combat this, retailers have to sink more money into administrative and technology teams to keep these systems in sync. The cost of maintaining this brand promise is high and very difficult to execute well with this strategy.

No. 3. Returns and exchanges are complex due to pricing differences

In-store returns of online purchases have a number of significant and valuable benefits. Customers who may initially be wary of making an online purchase take comfort in knowing that they can return the item to a nearby store. When returns of online purchases do happen, retailers enjoy increased foot traffic to their brick-and-mortar locations and the opportunity for one-on-one interaction with customers to further deliver their brand experience. However, despite these benefits, because the online system is not aligned with the in-store system, the online return is often isolated to just that transaction. Exchanges or additional purchases are kept separate because of this limitation. This can lead to a high friction experience that damages the retailer’s brand and adversely impacts customer satisfaction.

What happens next?

Customers have grown to expect to have the same pricing and promotions available both online and in stores. Many retailers have this policy but have not fully embraced it from a technology and operational perspective. Retailers are addressing specific scenarios to maintain the illusion that pricing and promotions are the same in both channels—but at a high cost, which includes additional labor to keep the systems in sync, compromising on the lowest common capability between systems and settling for a high-friction in-store return experience for customers. 

Fortunately, retailers can address and overcome these issues and reduce friction for their customers by adding pricing and promotion capabilities for unified commerce. Connect with us for more information on unifying pricing and promotion.

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