Software company Pricefx is advising retailers to be flexible this holiday season, the second year of the COVID-19 pandemic, as cargo ships are idled at ports and deliveries delayed.
"The supply chain is broken," the company said in a news release. "Now is the time to react, don’t try to fix it. Labor constraints will continue, and so will the breaks in the supply chain. Both of these factors directly impact pricing and will greatly affect the financials of this season so retailers should adjust pricing— up or down—based on these conditions."
Retailers may have to change prices several times a day, Pricefx said.
"Retailers and e-commerce businesses this holiday season should be ready and able to make smart pricing decisions in real time, in response to minute market movements, multiple times a day,” John Gilbo, retail pricing expert at Pricefx, said. “Competitors are constantly changing their prices in a very transparent market, filled with the side effects of the pandemic, like the broken supply chain and other challenging market conditions. This is an opportunity for retailers to reexamine their data, shift pricing algorithms, evaluate promotions and other pricing strategies to close out the year with a profit."
Inflation is also a factor to consider.
"Find strategies and tools to understand an inflationary environment and what should be done in response," Pricefx said. "Retailers need to understand these market conditions to change prices in market conditions to change prices in a timely manner, which will determine profit margins and customer loss or gain."
Data is a retailer's "strongest asset", according to Pricefx.
"Internal data is a great place to start with creating a baseline for customer insights that dictate pricing, like extra cost data, real-time inventory data, historical data and more," it said. "Identify Key Value Items (KVI) to prioritize items to focus on this season. External data sources should also be watched closely, from inventory to market share and other categories such as price segments and bi-directional data. Collect SKUs for competitors across different channels. And for both internal and external data, continue to cleanse, augment and challenge data as an ongoing process, through this holiday season and moving into 2022."