Following suggestions that retailers are failing to recognise the value of effective pricing, a new report has revealed concerning discrepancies in pricing strategies in UK retail.
Figures showed that, despite more than a third of retailers (34%) saying they know they should change their prices regularly, only 15% do so frequently.
The report, published by pricing and automation specialist, Omnia Retail, looked at pricing practices at 150 UK retail businesses.
Most concerning, said Omia, was that 3% of retail businesses surveyed said they never alter their product prices. A quarter said they only change their prices rarely - once or twice a year – and a third stated that they only do it sometimes or several times annually. A further 24% said they change their prices once or twice per month.
When it comes to the reasons behind price changes, the figures reflected the diverse mix of UK retail as a whole. Almost half of retailers said they base their prices on their competitors’ prices, while 41% said they alter their prices with the seasons. A further 37% of retailers said their prices are affected by sales events, such as Black Friday, a relatively low number given the growing importance of these retail holidays.
Around a quarter (23%) of retailers said that they take the weather into account when changing product prices, while 32% said they base price changes on stock levels; what’s selling – or not selling - at that moment in time. A third also said they will change prices based on margins. Lastly, 19% of the retailers surveyed, said they change their prices due to stock levels.
Omnia Retail CEO Sander Roose said: “These figures show that many retailers are aware of how important price flexibility is to their business. They are also likely to change prices based on important factors such as product margins and market conditions. However, there is clearly something holding them back. Time is likely to be a key factor here but, with the right tools – such as dynamic pricing software - brands can cut back on the guesswork associated with price management and automate price changes based on their desired variables.”