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Intelligent Pricing in the Changing World of Commerce


Pierre Hebrard

date of publication

February 14, 2023

time to read

4 minutes

The commerce landscape around us is ever-changing. Propelled by the Covid-19 pandemic, buyer habits have dramatically changed and the trend of shopping online continues to rise. In parallel, advancements in technology and digital commerce lowered the barriers of entry to selling online. With the emergence of new online channels, there’s never been a better time to tap into new markets. These developments have compelled businesses to accelerate their digital transformation in order to attract and retain customers, wherever they decide to shop.

But how can you navigate changing market dynamics and make intelligent pricing decisions to ensure profitability in this new world of commerce?

Let’s explore:

  • The blurring of the lines between manufacturers, distributors, and retailers
  • The proliferation of channels increases complexity
  • Changing market dynamics impact margins
  • Pricing as a strategic priority to remain profitable

The blurring of the lines between manufacturers, distributors, and retailers

As innovative technologies have emerged that enable companies to sell online, there has also been an evolution in the supply chain. With new logistics solutions that businesses can simply plug into, extending their reach to a new global customer base in both B2B and B2C has become a reality.

This has created a new paradigm where business models are no longer reserved to a particular sector. The lines are blurring between manufacturers, distributors, and retailers as they compete in the same playing field for customers.

In addition to selling to retailers and distributors, manufacturers now sell directly to consumers. Digitally native brands are diversifying and establishing wholesale businesses, while retailers have been developing private labels and giving brands a run for their money. Managing multiple business models means new pricing challenges to ensure profitability.

The proliferation of channels and increasing complexity

The growing number of online channels, including webstores, marketplaces, social networks, and quick commerce, inevitably brings more complexity. For each channel, businesses face challenges to remain competitive and maintain market share. On top of that, each channel entails different costs and companies must adjust their pricing accordingly to protect margins. Take, for example, the case of selling on marketplaces like Amazon. As a seller, you are confronted first with thinner margins due to commission, and second with a highly competitive environment with Amazon itself forming part of the competition along with other sellers.

It’s also vital to keep a balance between different channels to avoid one channel cannibalizing another. On a quick commerce channel, for instance, you need to find the exact price that’s attractive to customers. But you can’t price too aggressively as you might prompt your store and main website customers to switch over to quick commerce, where margins are lower.

It’s clear that B2B digital commerce is becoming prevalent, with McKinsey stating that the future of B2B is omnichannel. Businesses are ready to spend more money online and expect more digital, consumer-like experiences. Convenience is king — with 73% of people in procurement being Millennials, rather than discussing with salespeople, they prefer purchasing directly from webstores and marketplaces.

Agility is required when it comes to consistency across channels and companies must ensure that prices, discounts, and promotions are in sync and dynamically optimized, wherever customers decide to buy.

Changing market dynamics impact margins

Adding to this complexity, market dynamics are changing rapidly and frequently. Global supply chain disruptions have resulted in low stock levels and product scarcity in the market, which in turn increased prices.

Now more than ever, inflation must factor into pricing decisions. Rising to double-digit figures around the world, inflation is more erratic and its effects are more dynamic throughout the year.

With inflation comes higher costs. Businesses face the risk of eroded margins if they don’t transfer cost increases to customers. Keeping pace with frequent supplier price changes is challenging and time-consuming.

At the same time, businesses must ensure that their prices remain attractive to customers. They need to strike the right balance between passing on increased costs and accounting for customer willingness to pay.

In order to stay competitive and profitable, companies must also monitor competitor movements and swiftly adapt their pricing strategies when appropriate.

Pricing as a strategic priority to remain profitable

It goes without saying that this new era of commerce presents exciting opportunities for manufacturers, distributors, and retailers. But it also poses new challenges that, if not properly managed, could threaten business survival. Pricing must become a strategic priority to protect margins, maintain profitability, and increase market share.

Today, manually changing prices is no longer effective, nor is it efficient. Businesses are faced with the complex task of managing millions of prices across a multitude of channels and business models dynamically, and consistently. You must change the way you operate to be able to constantly optimize prices according to inventory levels, competitor movements, and changing market dynamics.

A purpose-built pricing solution can help with all of this and more. The right platform can enable companies to have a pulse on pricing insights to make data-driven decisions in line with business objectives. It can automate complicated tasks and provide the agility to constantly iterate and adjust prices with ease. Above all, a next-generation pricing platform can derisk decisions to give businesses the confidence to make intelligent pricing decisions.

With Pricemoov, you can harness the power of a price optimization and management platform to:

  • Centralize your data and access real-time insights to make accurate and timely pricing decisions
  • Manage all your prices in one place simply and efficiently
  • Optimize your prices with powerful data science and end-to-end automation
  • Deliver prices to any channel or system seamlessly
  • Enable your sales team to win more deals with increased margins and reduced time to quote
  • Monitor and analyze your pricing performance for continuous optimization
  • Collaborate with all pricing stakeholders in your organization on a single platform

Key takeaways

The world of commerce is evolving into an omnichannel playground where manufacturers, distributors, and retailers are competing for the same customers. It is now essential to incorporate price management and optimization as part of a digital transformation strategy. To overcome the risk and uncertainty of manual price setting, companies must enlist a next-generation pricing solution that can unlock their revenue potential with intelligent pricing.