Retailers need to find a more efficient system for making changes to promotions and prices, says Peter Lewis
While we hope The Grocer's Push Back the Tax campaign is successful and that the government will see that implementing changes around New Year's Eve is nonsensical, it also highlights a challenge many retailers face that implementing price and promotional changes, for any reason, is both costly and time-consuming.
In the current economic climate, many retailers are having to run more price promotions to tempt consumers to spend, while already struggling to cope with existing activity due to reduced staff levels.
This challenge is actually an opportunity to make changes that will save money, improve the offer and create a price and promotions labelling and signage infrastructure that will cope with sudden and unavoidable changes such as the reversion to 17.5% VAT.
Most retailers' current processes are time consuming and require many labour hours to make changes. A huge amount of effort is expended in sorting through signage sent by head office that often does not apply to individual stores. This is because many retailers adopt a 'one-size-fits-all' approach to promotional signage and therefore stores receive material they don't need, or is the wrong size, or simply the wrong quantity.
As retailers increasingly focus on reducing their carbon footprint, we are seeing more retailers focus on signage to communicate their ethical offer in the 'last four feet'. In addition, if the pricing and signage process is inefficient, retailers are less likely to be able to execute their promotional activity profitably.
The answer is a price and signage infrastructure that is managed centrally, but can allocate materials according to each store's needs.
Whenever VAT returns to 17.5%, it will be a headache for all retailers, but one that can be mitigated using efficient processes that bring immediate benefits in terms of labour hours saved and reduced paper and printing costs. Promotional effectiveness is boosted by accurate pricing, up-to-date and properly placed material and items that are never missing their labels. Retailers in turn can query the system to ensure that all stores have complied.n
Peter Lewis is marketing director of global IT services company Episys