With technological advancements in the digital space, evading minimum advertised price (MAP) policies has never been easier. Easy access to disruptive technology means that retailers could be dodging price monitoring activities by encrypting online prices, making personalized discount offers via email or social media, implementing coupons, instant rebates, and countless other ways you may not be prepared for.
An increasing number of channel managers and legal counsellors realize that MAP policies need constant re-consideration to keep up with new challenges. Here are some factors to consider when framing and enforcing your MAP policy this year.
When framing the policy
1. Include rules against price obfuscation Retailers could engage in various price obfuscation practices such as asking shoppers to call, register to their website, or revealing prices late in the shopping process. These prices can often be below the agreed MAP, but you can restrain such tactics by defining them as violations in your MAP policy.
2. Complement your MAP policy with a UPP policy for high-value products
A standard MAP policy might not be enough to protect your brand from deep checkout-level discounts. If you notice an increase in checkout-level discounting, consider complementing your MAP policy with a Unilateral Price Policy (UPP) to discipline over-discounting at the checkout page.
3. Add flexibility to MAP rules during key shopping seasons
At Ugam, we notice a spurt in MAP violations by 15-20% soon after key shopping seasons. Some brands choose to enforce their price monitoring for these times. Alternatively, to avoid too many retailers from undercutting each other, a lot of brands vary their MAP prices for specific seasons to give retailers additional room for lowering prices.
When enforcing the policy
1. Tune the monitoring based on retailer segments
The Internet is wide and complex, and it can be too far-fetched to expect 100 percent MAP compliance at all times. Depending on parameters such as volume of sales that fall below MAP, you can tune your monitoring to specific retailer segments (large online retailers, marketplaces, local retailers).
2. Track mobile apps and mobile ad networks
It’s no longer enough to only monitor website prices. In 2015, the usage of shopping apps grew faster than any other category of apps, according to mobile analytics firm Flurry. The surge in smartphone apps has also given way for mobile ads that you can’t afford to ignore any longer.
3. Use data scorecards to encourage compliance
Agreeing to a MAP policy often means that retailers will be undercut by others who don’t. There’s an opportunity to use data scorecards to influence desired compliance.
While technology disrupts, it’s also an enabler. Ugam’s brand intelligence solution combines a proprietary big data technology platform and analytics expertise to uncover channel insights and recommend pricing policy enforcement actions. We monitor over 350 marketplaces and retailers, millions of products, and deliver about 500 million price points each month, to help brands take quick action, when necessary, to preserve a consistent brand value. Speak to us today to learn more.
Some of the content in this article originally appeared in The Website Magazine on February 17, 2016.
Mihir Kittur is a Co-founder and Chief Innovation Officer at Ugam. He oversees sales, marketing and innovation and works with leading retailers and brands with insights and analytics solutions around their category decisions to improve business performance.