Six Reasons Why Retailers Need Dynamic Competitive Intelligence Solutions: Part II
Traditional Comp Shop Programs Don’t Account for Omni-Channel
Omni-Channel is no longer just a buzz word. Millennials now represent over 50% of retail spending. Both they and your traditional shoppers expect retailers to meet them wherever they like to go and however they prefer to interact. As a result, retailers are increasingly testing and rolling out click-and-collect and delivery programs. According to IBISWorld, online grocery sales are expected to increase 9.5% annually to become a $9.4 billion industry in 2017.
With all this in mind, retailers are beginning to realize that they can’t just look at the in-store data anymore—in fact now it’s much more cost-effective to use online data and augment with directed in-store checks. It becomes even more critical that retailers leverage solutions that help them understand where they can responsibly leverage online data (because sometimes the assortments don’t fully match) and where to use in-store data. Retailers’ online vs. in-store strategies are constantly changing, and so a hybrid approach becomes even more critical to maintain complete visibility.
Engage3 market data demonstrates that while many categories and departments are still being priced at a national level, there is a strong trend towards increasingly localized pricing. It’s these location-specific products and categories that can be detrimental to a retailer seeking true visibility, because KVI lists and comp shop budget dollars are not allocated and reallocated appropriately. Far too often we see that many retailers’ competitive intelligence programs still leverage static, banner-level lists by which margin opportunities are missed and price reputation is threatened. It’s imperative that competitive intelligence programs be able to respond to market changes and leverage real-time analytics to maximize ROI.
Tactical, Rather Than Strategic Focus
Most retailers today put too much emphasis on the competition’s prices as they change, rather than the strategies that are being employed at the root of those changes. The comp shop processes of old produced data that was far too old and stale by the time it was received, and thus it has historically been much more difficult to discern the competition’s pricing and assortment strategies. Retailers need the ability to take a step back, see the bigger picture, and truly understand the competitive landscape and strategies that are being deployed around them.
We’ve seen that most pricing departments are responsible for managing a budget, however, oftentimes they aren’t responsible for measuring the quality or exact value that the program returns. How does your team measure the effectiveness or value of your competitive intelligence program today? We’ve seen over time the incredible value of appropriate Key Performance Indicators (KPI’s), or measurements, being defined and maintained to evaluate the program. KPI’s may include find rates, accuracy, competitive price visibility, completion rates, Return on Investment, and more.