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The Lesser of Marketing’s Four P’s Rears its Head

Nearly half of all online traffic to retail websites this past holiday season arrived there via mobile devices. That compares to less than 7% only four years ago, according to the the IBM Digital Analytics Benchmark. So do you think all that traffic was due to people reading product reviews? Probably quite a few. Watching brands’ video ads? Not so many. Comparing prices? Bingo!

One of the hot topics percolating beneath all the hype on the show floor at the National Retail Federation show in New York this week was price transparency. Price is the least ballyhooed “P” of the famous “Four Ps” of marketing, an element taken for granted among luxury or discount brands, or merely considered an accounting addendum after product, place, and promotion had been established. But consumers and their handheld digital research tools have changed all that. Mobile devices have forced the conversation levels up on pricing.

“Pricing is now the game in data analysis,” said Michael O’Sullivan at the Teradata Booth. He works with the company’s Big Data Analytics News Services. “Pricing is what’s going to be driving data-driven marketing at retail. It’s about putting the power of timing and relevance together to address price.”

Teradata’s savviest customers are not stopping at collecting data from cell phone traffic, but from interaction with customers in the aisles and even—with opt-in—fitting rooms. “It’s all part of a new movement called ‘clientelling,” O’Sullivan said.

At the LoyaltyOne booth, VP Graeme McVie observed that price transparency is causing disruptions in retailers’ pricing and promotion strategies. Most have well-established images as discounters or high-quality providers, but those positionings are being tested by the best-informed shoppers in history. “Many are not pursuing the right price strategies. There’s only a small percentage even looking at it,” said McVie, who pointed out that several supermarkets have done away with loyalty programs at a time when they could be the preferred conduit through which to offer personalized pricing to customers.

Price has long been at the forefront of marketing strategies in the UK’s compressed retail environment, said Accenture Senior Managing Director Chris Donnelley, who’s done a stint for the consulting company in England. “Imagine Albertson’s, Kroger, and HEB all operating within a geographic area the size of New England. It’s brutal,” he said. “The bottom line is that price is the biggest factor to consider in setting the rest of your marketing strategy. And the two biggest things that marketers can use to compete with in the shadow of price is promotion and customer experience.”

Price is already the most important product metric among buyers. No doubt, it will be receiving a lot more attention from sellers in the coming year.

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