The Dynamic Pricing Silver Bullet for Retail & Fast Food
Airlines and hotels have been using dynamic pricing successfully for years and now mobile coupons are letting retailers and fast food outlets get in on the act and bolster their profits in the same way.
The need for dynamic pricing
Dynamic pricing is the practice of offering goods at a price that changes according to time of day, day of week, type of customer, customer transaction history, weather or current demand. The problem that dynamic pricing solves is that each customer has varying degrees of price sensitivity. Dynamic pricing allows businesses to optimise the amount of revenue they can obtain from their product inventory, whilst reducing or eliminating unsold product.
A recent study released by Retail Systems Research this April indicated that 67% of retailers now consider customer price sensitivity to be among their top 3 business challenges, up 10% from 2012. In the same piece of research, 66% of businesses were either already using or on the journey to rolling out pricing intelligence systems. Clearly the time to act is now.
How mobile coupons help with dynamic pricing for retail & fast food
Online retailers from giants such as Amazon to smaller players have been using dynamic pricing techniques for a number of years, but traditional “bricks and mortar” businesses have been slower to adopt the web led technologies that power them and have suffered falling sales figures as a result. Mobile coupons are being hailed as an easy way for traditional retailers to regain some of the ground lost to online business.
Many web technologies just aren’t suited to the traditional retail environment, but mobile coupons are one of those that are proving particularly impactful. Mobile coupons allow retailers a simple route to offering discounts based on time of day, day of week, customer demographics, transaction history, or how busy they are (or aren’t).
Some examples of when to use mobile coupons and dynamic pricing:
• Slow Times: All retail and fast food businesses have peak times and quieter ones, dynamically priced offers which are distributed via mobile coupons allow you to stimulate customer flow during your slow periods without resorting to revenue share coupon services such as Groupon or Living Social.
• Slow Moving Stock: Much as we’d like to think we never buy a unwanted stock, it happens to everyone. Time limited discounts distributed via mobile coupons are a great way of quickly liquidating the cash tied up in slow moving stock (after all most mobile coupons are used within 48 hours). In addition to helping shift slow moving stock it they also incredibly effective at moving perishable stock.
• Product Launches: Aside from your normal in store fanfare, using a time limited introductory offer via a mobile coupon will entice customers to visit the premises and try a new product. This will result in them increasing their annual spend with you while also ensuring word of mouth marketing for your new product.
• Tough Markets: When the competition gets hotter (perhaps a new player comes on the scene), using mobile coupons to release a dynamic pricing campaign is a great way of securing existing business and/or taking it away from your competitor.
Imagine if an airline decided it wasn’t going to do dynamic pricing in today’s market, it wouldn’t last long; the same will be true of retailers who don’t adopt new technologies and move with the market. Dynamic pricing will pay an ever increasingly important role in the success of retail and fast food businesses and mobile coupons will form a key tactic within any dynamic pricing strategy.
Mobile coupons take 5 minutes to prepare, are read within 15 minutes and redeemed within 48 hours. For more information about sending highly targeted mobile coupons contact [email protected].