Retail chains have evolved far beyond the traditional brick-and-mortar stores to digital stores that offer immersive customer experiences. The only constant in the retail evolution has been change, and, as with most other industries, these changes are customer-centric. Purchase behaviours today vary significantly based on various regional, cultural, and other demographic aspects. Customer journeys are quite diverse – from those who browse in-store and order later through mobile apps, and those who research online before completing a purchase in-store, to the fully digital or fully physical shopper. As such, the challenge for retail chains is to ensure seamless experiences across all physical and digital touchpoints. It is this challenge that made omnichannel retailing a strategic imperative. Yet, within this strategy, pricing remains a formidable hurdle.
ERP (Enterprise Resource Planning), once considered a back-office tool, is today the backbone that orchestrates omnichannel retail customer experiences. It plays a key role in the retail process workflows by ensuring dynamic and customer-centric pricing that drives trust and loyalty. ERPs enable retail chains to make complex pricing trade-offs in real-time, through coordinated category, channel, and product strategies.
understanding the omnichannel pricing challenge
Customers who browse multiple channels before purchasing and find inconsistent pricing will feel something is amiss. This can lead to distrust and impact the brand reputation in the long run. Most customers are unaware of the complex factors that influence retail pricing. For example, warehousing and shipping charges impact digital store prices, while rent and staffing overheads influence in-store prices. Balancing customer expectations and adhering to the Minimum Advertised Price (MAP) across different channels is challenging. Region-specific taxes, promotions, loyalty offers, and discounts add to pricing complexity. Often, this challenge, if not addressed, leads to customers abandoning their carts and the brand. ERP manages this omnichannel pricing challenge for retail chains by becoming the single source of truth that guides pricing strategies. Let’s see how.
- centralised pricing
- dynamic/intelligent pricing
- streamlined taxation and compliance
A robust omnichannel retail ERP harmonises product pricing across all channels. ERPs can consolidate all parameters that affect a product’s pricing, such as landed cost, taxes, margins, promotions, and others, to ensure consistency that builds customer trust. Additionally, it lends transparency and easy auditability to the process. Whether a flash sale on a marketplace, adding a markup for a product low on stock, or easing prices for selling ageing inventory, the pricing algorithm of an intelligent ERP can manage it all efficiently. More importantly, retailers can build approval workflows into the automated system to ensure requisite human oversight. A key advantage of this from a sales and fulfilment perspective is that it minimises price disputes and errors.
Agility is a major success factor in a highly competitive sector like retail, and dynamic pricing plays a key role in enabling it. To achieve this, it is imperative to constantly analyse market signals. Advanced ERPs can embed agility directly into the fulfilment processes through analytics-driven real-time pricing enabled by rule-based workflows. For instance, price adjustment for a product that sees a sudden demand across all channels can maintain customer interest while optimising margins. Predictive analytics can forecast sales volumes based on the new price to augment such dynamic pricing decisions. Unlike traditional systems, retailers can work with and set multiple rules that retain profitability for each product by automatically applying these uniformly across channels when set thresholds are met. This lends a much-needed competitive advantage in a sector where delays can have significant impacts. The technological advances in this domain point to a future where we may see hyper-personalised dynamic pricing become the norm.
Global retail chains must navigate the complex maze of regional taxes and regulations, which keep evolving due to various factors. Advanced retail ERP systems can automate compliance and ensure that the prices reflect the latest taxes. Retailers can embed tax logic into pricing workflows, assuring transparency to customers. ERPs can also ensure regional or seasonal prices adhere to MAP. Automated compliances also strengthen fulfilment and return workflows. Additionally, ERPs can generate compliance reports to enhance financial accuracy and help avoid penalties and associated legal issues.
In addition to the above points, intelligent ERPs have the capability to accommodate regional pricing strategies within a centralised pricing structure. Predictive analytics lend a futuristic twist to ERPs, with capabilities like demand forecasting, price scenario simulations, and market trend-based recommendations. The latest retail technology trends include geofencing, Gen AI and sentiment analysis, automated checkouts, IoT and blockchain integration, smart shelves, etc. Intelligent ERPs can integrate these trends to help retailers remain customer-centric, competitive, and agile while ensuring pricing consistency and accuracy.
how can Infosys BPM help?
Infosys BPM’sAI-first Sales and Fulfilment services help our retail customers drive growth and productivity through best-in-class solutions that optimise end-to-end operations. From driving growth through hyper-personalised experiences to improving revenue through data-driven, sentient operations, the autonomous processes we develop seamlessly align sales and supply chain capabilities.
