1、vThe ultimate guide to retail pricing and promotions 212345Whats insideDrive conversions with price positioning A holistic approach to pricing and promotions The psychology behind price positioning EU compliance with the Price Indication DirectivePricing management:a painful setupStreamlining pricin

2、g and promotion workflowsPricing and promotions within the commerce journey Site-level pricing Item-level pricing Basket-level pricing Customer-level pricingBest practices for pricing and promotions success3For the majority of retailers,pricing and promotions strategies have historically been kept a

3、part.Combined with legacy software and disjointed data,creating a harmonized strategy across the two involves a huge amount of manual work,complicated workflows,and cross-team dependance.Thats why were excited to launch our Pricing Engine,a new solution thats set to transform your current pricing an

4、d promotion workflows,particularly when it comes to strikethrough pricing.Its important to clarify that the Pricing Engine is not a source of truth for your base price that remains with your PIM and ERP.Instead,the Pricing Engine consolidates your pricing and promotion workflows in one simple interf

5、ace,and acts as a source of truth for all your markdown and strikethrough pricing as well as all your other promotions.It serves as the connective tissue between the systems that generate and use customer,inventory,and session data,and makes markdown pricing easier to manage than ever before.Christo

6、ph GerberFounder&CEOA new way to manage pricing&promotionsIn this guide,well be looking at the ins and outs of price positioning,best practices for pricing and promotion success,and a deep dive into Talon.Ones Pricing Engine.1Drive conversions with effective price positioning5In many companies,strik

7、ethrough pricing and promotions are treated separately but the reality is that they are inherently linked.Where does one start and the other begin?After all,consumers dont differentiate between pricing and promotions:they only care about the final price.Thats why effective price positioning,and sign

8、alling value to the customer,shouldnt live in a silo and requires a holistic approach that runs across teams and across pricing,promotions,loyalty and personalization.Signaling value to shoppers requires a holistic approach to pricing,promotions,loyalty&personalizationA holistic approach to pricing

9、and promotionsPricingIncrease conversion and basket size with SKU-level value positioningPersonalizationLayer customer data across the rest of the value portfolio LoyaltyIncrease user retention,spend,and frequency with loyalty programs and activationPromotionsAcquire users&drive conversion through c

10、oupons,referrals,discounts,and other promotions6The psychology behind price positioningScarcity marketingPrice anchoring is a popular marketing technique where retailers presents a higher-priced option alongside a lower-priced option.The more expensive item serves as an anchor for shoppers,making lo

11、wer-priced options appear more attractive by comparison.Its also a useful technique to use for promotions and discounts:showing the full-price offer anchors the sale price and encourages purchases.The anchoring effectDiscounts create a sense of urgency,linked in part to the idea of scarcity:shoppers

12、 know this deal isnt always available,the price might increase again,or the product might go out of stock.That makes consumers less likely to shop around and speeds up the buying process in case they miss out on a deal.Regret from missing out on a deal is another big urgency driver when it comes to

13、promotions.Promotions and discounts are a powerful way to move customers past the purchase threshold,allowing brands to signal value with popular marketing psychology principles-including:177%of consumers say that discounts influence their choice of where to shop Forrester 8The EU Price Indication D

14、irective is a policy that came into effect in May 2022,ensuring consumers receive fair and clear pricing information.A retailer must indicate the prior price of an item when reducing it.In the Directive,a prior price is defined as the lowest price applied by the merchant in the last 30 days.The goal

15、 of the directive is to stop retailers promoting fake price reductions,inflating prices before offering a discount,or misleading customers on a sale price.Retailers that ignore the EU Pricing Indication Directive risk a similar system of penalties to that introduced by GDPR.Fines for breaches of the

16、 Directive are capped at either 4%of a companys annual turnover in these countries(if available)or,if this is not possible to calculate,2 million.Member States can introduce their own higher penalties when they implement the Directive.EU regulations are further pushing price positioning under the sp

17、otlight,with new rules that make it easier for consumers to compare different offers especially discounted versus non-discounted prices.Staying EU compliant8Another important aspect of the price reduction is that,after it has been implemented,the old price should be presented in crossed-out format o

18、n a retailers website this is called markdown pricing or cross-out pricing.This adds extra complexity for pricing and promotion managers,particularly when it comes to updating prices and implementing these changes across both the back and front end.“The prior price means the lowest price applied by

19、the trader during a period of time not shorter than 30 days prior to the application of the price reduction.”“Any announcement of a price reduction shall indicate the prior price applied by the trader for a determined period of time prior to the application of the price reduction.”European Union Omn

20、ibus DirectiveArticle 6a of Directive 98/6/EC10There are several ways retailers can present the price reduction on-site either through strikethrough pricing,or by simply presenting and labelling the prior price.However,this often adds extra complexity for pricing and promotion managers,particularly

21、when it comes to updating prices and implementing these changes across both the back and front end.This is a key benefit of Talon.Ones Pricing Engine,which calculates the previous price automatically based on the data you sync from your PIM combined with the promotions and markdown pricing set up in

22、 Talon.One.By simply turning on a toggle within Talon.One,we start pushing the best previous price to your system.What does the EU Price Indication Directive mean for retailers?Lets imagine your business sells a variety of products but temporarily stops offering some items for seasonal or timely rea

23、sons,for example summer clothing.In this case,the expectation to indicate the prior price is not applicable if its been more than 30 days since you sold that product on that market.When this happens,you should indicate the prior price as the lowest price applied in the period immediately before the

24、interruption.What about seasonal products?2Pricing management:a painful setup12When reducing items,the new EU law requires brands to show its lowest price since 30 days.Communicating markdown prices to a web stores frontend is often managed separately from promotion workflows or sometimes isnt imple

25、mented at all.Pricing and promotions strategies are currently siloed between teams and tools meaning many retailers are leaving money on the table by being unable to run the right price,to the right person at the right time.Missed revenue opportunitiesRetailers current workflow involves several diff

26、erent tools for example SAP,Salesforce Commerce Cloud,and product data tools.This leads to delays in pricing updates and disjunct data.Legal complianceMany retailers still rely on manually uploading Excel templates to their PIM system.This further complicates real-time pricing and use cases where re

27、tailers may only want to show discounts to a selected group.Manual processesDisjunct systemsGetting your pricing strategy right is only half the battle:its the implementation where retailers currently struggle most.When speaking with clients about their current set-up,we identified four common pain

28、points:The current pricing and promotions workflow“Our current setup for markdown pricing is very manual:we have an Excel template which we upload to SAP and connects to our payment and web system.This only allows us to run basic promotions,and means theres lots of room for error.”Talon.One client i

29、n the retail space14When speaking to our retail clients about how they currently manage their pricing and promotions strategy,we saw a clear need to simplify the setup and develop a more granular strategy.All retailers mentioned similar pain points:How is pricing handled today?Setup simplicity.Strat

30、egic sophistication.BASIC APPROACH,SIMPLE SETUPBasic ability to add a simple markdown price in commerce platform/PIM/ERP/pricing toolSOPHISTICATED APPROACH,SIMPLE SETUPAutomated/AI approach that dynamically sets markdown pricing.Pricing is harmonized with other personalization and loyalty initiative

31、s.BASIC APPROACH,PAINFUL SETUPConvoluted and error-prone approach to run basic pricing on site,typically manual spreadsheetsSOPHISTICATED APPROACH,PAINFUL SETUPPricing strategy in line with inventory,item,and customer data,but managed via convoluted spreadsheet workflows and manual calculationsMost

32、of the market is hereTalon.One powered pricing managementDelay in price updates3Complicated workflow4EU price compliance requirementsDisjunct systems1Excel sheets tracking5Data inconsistency2Manual data combing 6 73Streamline your pricing and promotion workflows16Hearing about retailers current conv

33、oluted setup showed us a clear need for a better workflow.We built the Pricing Engine to address these challenges:no more manual price tracking in Excel,just a single source of truth to manage your pricing and promotions strategy in real-time.Three pillars working togetherOur solution works in tande

34、m with our existing Loyalty&Promotion Engine,and together,they turn data from your customer sessions,shopping cart actions,customer purchase habits and product SKUs into one harmonized strategy.17Talon.Ones Pricing Engine:A single source of truth for all your pricing and promotion workflowsThe Prici

35、ng Engine works by consolidating pricing and promotion workflows into one easy interface.Your pricing strategy will still be based on the usual price determinants,but by integrating with Talon.One,youll be able to push prices from your PIM to the Pricing Engine to more seamlessly manage markdown pri

36、cing and product labelling.Pricing Engine functionality Drive conversion with real-time strikethrough pricing and product labeling Optimize inventory and drive revenue with SKU-level discounting Strengthen your loyalty programs value prop with personalized and member pricing Communicate prior prices

37、 in compliance with the EU Price Indication Directive(in development)Centrally manage all price modifications and push markdown prices back to your PIM(in development)Inform pricing decisions with historical SKU-level promotional data in your data warehouse(in development)18From dinosaur to dynamicC

38、urrent workflows are painful,piecemeal,manual,and error-prone,and mostly come down to spreadsheet uploads with no strategic approach.The Pricing Engine enables an effective,efficient,and low-risk pricing&promotions approach,serving as the connective tissue between the systems that generate and use c

39、ustomer,inventory,and session data.By consolidating multiple workflows and price determinants,you can easily manage and automate your price positioning.19Learn more about how the Pricing Engine works and explore potential use cases by reaching out to us below.Keen to see the Pricing Engine in action

40、?Stay compliant and avoid heavy fines with easy markdown pricing.Implement markdown rules with Talon.Ones Pricing Engine,which automatically calculates the previous price based on the data you sync from your PIM,combined with the promotions and markdown pricing you set up in Talon.One itself.Sync re

41、al time catalog updates to better manage stock,and target different products for different campaigns Talon.One automatically updates this data in real time whenever your promotions or product catalog change.Customize promotion messaging and incentives via product labeling.Plus,define rules to target

42、 which products and categories you want to display previous prices for.Simplify operational workflows with one modern solution to manage all price changes&promotions.Drive additional revenue and improve conversions by de-siloing pricing strategies,and enable your teams to run the right price to the

43、right person at the right time.Automatic updates based on catalog changesVisualize discounts and product labelling Increase trust with EU compliance pricesStreamline price positioning workflowsWhat sets the Pricing Engine apart?Reach out to learn more 4Pricing and promotions throughout the commerce

44、journey21Best practices Site-level promotions are unified offers that are displayed app-or site-wide,and apply to all users regardless of which customer segment they fall under.These promotions are powerful ways to increase global conversion and clear a glut of inventory.Talon.Ones strikethrough pri

45、cing can be applied site-wide by syncing your product catalog and building strikethrough campaigns with advanced product filters.Combine markdown pricing with site-wide banner displays to further attract shoppers and highlight sales offers.Site-level pricing&promotions Infrastructure Update11W H A T

46、 I S I T?B E S T P R A C T I C E S22 Item-level promotions are set up per individual product,and can be viewed on a web stores homepage or on the individual product listing page.Talon.One supports this with markdown pricing,and with easy to set-up and fully customizable product labeling.Retailers ca

47、n use product labelling to further highlight an offer,or spotlight loyalty program benefits and member prices.Once youve connected your product catalog,you will be able to set up product filters to customize your pricing and offers for each product.Product labelling is set up as an effect in Talon.O

48、nes rule builder,where youll be able to define the offer and the messaging within the labels.Test and iterate on product labelling messaging and design to understand what drives greater number of conversions.Item-level pricing&promotions W H A T I S I T?B E S T P R A C T I C E S23 Win-back promotion

49、s are classic examples of basket-level promotions,and can be a powerful way to reactivate lapsed customers.Consider offering targeted promotions based on why a customer may have stopped shopping with your brand,whether thats a discount on their next order or free shipping.Basket-level promotions are

50、 those applied across a customers basket during the checkout whether thats via a coupon,discount,product bundle or spending loyalty points.Basket-level pricing&promotions W H A T I S I T?B E S T P R A C T I C E S24 Personalized promotions work equally well in combination with site-level promotions.B

51、y combining them,retailers can create a streamlined shopping experience,offering one-size-fits-all rewards upfront on a retailers homepage,while analyzing personal data and attaching customized offers to drive individual engagement and conversion further down the funnel.Personalized promotions are o

52、ffers tailored based on buyer profile and session data,such as CLV,loyalty program membership or purchase history for example,you could offer bigger discounts to loyalty program members or users with higher CLV.With Talon.One,users are able to set the conditions and effects as granularly as needed,d

53、riving individual engagement and conversion further down the funnel.Personalized pricing&promotions W H A T I S I T?B E S T P R A C T I C E S5Pricing and promotions strategy best practices26An experiment published in Harvard Business Review shows just how crucial direction and frequency of price shi

54、fts are.Their results,based on 5,000 adults across the U.S.and Europe,found that:When consumers saw the price today was lower than it had been in the past,they were more likely to buy now,because the current price seemed like a good deal.If consumers were shown at least three changes in the same dir

55、ection,they were likely to assume the price would continue to move in the same direction.If they saw one or two changes in the same direction,they expected the price to change in the opposite direction.When implementing markdown pricing or sales prices,both the direction and frequency of price shift

56、s has a big impact on shoppers purchasing decisions.Manage the direction and frequency of price shiftsB E S T P R A C T I C E 1312For sellers,this means that a single large price decrease,or a series of smaller price increases will be most effective rather than slowly lowering the price over time.27

57、No matter how attractive a deal,todays shoppers dont just focus on item price:any additional costs,whether its shipping,taxes or administrative fees,can make or break their purchasing decision.For retailers,this means reinforcing the value of the item and promotion-for example,by introducing scarcit

58、y marketing related to the product(indicating how many discounted items are left)or the promotion(indicating how long the discount will run for).More broadly,brands should also be thinking about how out-of-the-door prices affect shopper behavior,and testing any areas that can introduce savings for t

59、he customer.This could include introducing product bundles to reinforce value to customers,or lowering delivery costs,for example by offering longer delivery times for cheaper shipping fees.Focus on out-of-the-door price,not just item priceB E S T P R A C T I C E 228Promotions can be a double-edged

60、sword,particularly for luxury brands.While theres no doubt they increase sales and attract new customers,they can also weaken brand perception if theyre not implemented wisely.Protecting this feeling of exclusivity is key for premium brands looking to implement sophisticated promotions and pricing s

61、trategies.The general rule of thumb is that discounting works best when youre super selective.For this,consider working with:Members-only(private)discounts that strike a balance between offering promotions and keeping your loyal customers satisfied.VIP promotions that make every touchpoint of the cu

62、stomer journey memorable and exclusive whether thats discounts,premium gifts,or early access to sales and product drops.Exclusive product bundles,that combine certain high-price products at a special discounted price.Consider how pricing and promotions will affect brand image312B E S T P R A C T I C

63、 E 32955.9 B coupon codes in our databases40 ms 60 msaverage response timeTalon.One-the leading loyalty&promotion platformGlobal reach 24/7 business and support coverage155 M API calls for a single client on Black Friday19 GCP regions utilized by Talon.One clients with single tenant infrastructure10

64、0%uptime in the last 24 months1.4 B customers profiles in DB for one of our customers200+Enterprise clients7 minaverage response time for customer support and incidents in 2021Jsto increases basket value by 25%with Talon.One and BrazeRead more Share Now works with Talon.One to launch their multi-tie

65、r loyalty programRead more Talon.One helps River Island to create omnichannel customer experienceRead moreTalon.Ones definitive guide to customer loyaltyRead more The Talon.One guide to group loyaltyRead more Headless loyalty for Salesforce B2C CommerceRead moreYou may also be interested in readingThe worlds most powerful loyalty&promotion engineASK ABOUT OUR INTEGRATIONStalon.one/contact-usBOOK YOUR FREE DEMOtalon.one/book-a-demo