Dynamic price changes and its implications for MAP monitoring

Camilla Vaidyanathan, Solution Manager, Ugam,

MAP Monitoring,minimum advertised price,Online brand protection,Dynamic price changesI outlined some of the key factors driving the end of MAP monitoring as we know it in my previous blog.

One of those factors is the new and emerging capability retailers have to dynamically change prices. Some of them are able to change prices within minutes and it makes it very difficult to detect MAP compliance.

Online prices for consumer goods are bouncing around like the stock market.  According to RIS News, Best Buy and Walmart have each been changing their prices more than 50,000 times a month – and Amazon made more than 3 million price changes during the 2013 holiday season.
Here’s the math: There were 36 days between Thanksgiving and January 2. That’s 864 hours or 51,840 minutes.  Amazon made an average of at least 57 price changes per minute, or nearly one per second. That’s a dizzying statistic no matter what you’re buying or selling.

Channel Managers and Pricing Analysts at brands are overwhelmed, unprepared and unsure as they deal with a whole host of questions:

The frequency questions
In this paradigm of dynamic pricing, at what frequency should I be monitoring to effectively detect MAP compliance?
Are there certain days, periods, events or triggers when one should increase the frequency of MAP monitoring? Can smart technology help?

The scope questions
On account of this dynamic price change, should certain retailers be tracked with a different intensity v/s others?
Should we include additional channels like marketplaces, comparison shopping engines? The price dynamism varies by categories, should we modify our current approach of “one-size fits all”?

The data quality and analysis questions
With all this dynamism, how am I to be sure that the data captured and analysis presented is accurate?
What changes to do I need to make to my analysis frame so as to better understand who initiated the MAP violation?

The action question
What changes do we need to make to drive more meaningful and timely action?

Based on my conversations with several brands, I sense a clear recognition that the factor of dynamic pricing is playing an important role and causing them to re-think and evaluate their current approach to MAP monitoring. They realize that that their current methods need an overhaul and standing still is not an option.

The Author:
Camilla is a Solution manager at Ugam and is part of its retail analytics team. She oversees the Brand Intelligence solution and is responsible for helping brands use data to inform actionable decisions around pricing, assortment and content. On the personal front, Camilla enjoys singing and would love to be part of a band.


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