Pricing, strategies, and the application of data and analytics to ‘win’

It’s been one of the most extraordinary years’, circumstances about the speed the pandemic took hold, its newness or uniqueness and our lack of ‘immunity’ which led to the entire world coming to a standstill, almost simultaneously.

It caused an unparalleled level of change, from how we live our lives, it defined what we could and couldn’t do, and helped us to see what was most important. It led to seismic changes in behaviour and consumerism, with the metrics we once used to understand the ‘needs’ of our target markets changing dynamically too.

In our recent pulse survey ‘Consumers and the New Reality’ the findings had three key observations. ‘Customer experience’ and ‘optionality’ were bundled as the most critical drivers of consumer behaviour and spend. Second, and no surprise, was a greater emphasis on ‘trust’ … interestingly not only in ‘brands’ but ‘food systems’ too. Third, was ‘my personal safety’ defined by a shopper’s awareness of their personal safety while making their purchases. It leads to deeper questions on our existing in-market partners, and whether they are adapting their businesses adequately to ensure New Zealand’s products are positioned to sell and sell well.

Complex?... Yes!

Doable? Yes!

Same way?... No!

New Zealand continues to invest in our Economic Plan released in 2019 to “build a productive, sustainable and inclusive economy” with the objective of becoming a more productive nation… that is right, but lessons from this year indicate smart iterations of how we compete in-market are needed.

The continuation and level of investment in telling our stories is important, but there is a danger that they are too similar to other countries, especially for those who zero in on singular aspects such as ‘attributes’.

Is it differentiated enough that a consumer can distinguish the difference to a level where their willingness to pay increases?

I heard, and still hear the need to ‘pivot’ to an e-commerce offering to combat the effects of C-19. Interestingly, asking ‘who, what, when, where and how’ unearths that clarity around the addressable target market or the execution side of the conversation is given less consideration. ‘Op-model’ changes for instance are not often considered to not only meet any new need, but also to be competitive.

It is less known, or perhaps discussed, but challenges exist within e-commerce channels too. ‘It’s a blood bath’ was referenced in a conversation with a leading retailer in China, between ‘bottle necks’ in the layers of more complex supply chains to the 'plethora of new platforms' meant that the battle has intensified and is now about getting ‘traffic’ between off-line “bricks and mortar” and on-line, digital channels to drive sales and grow.

Is ‘pivoting’ by channel going to deliver the enhanced profit?... it’s yet to be seen or is New Zealand’s competitive advantage combining the above with subtle, smart application of data, analytics and machine learning to 'win' through pricing models?

Analysts reported that a fuel companies profitability dipped whenever raw material costs rose, obvious! But, by doing a pricing diagnostic and prototype, the organisation measured potential margin uplift from addressing the issue. They found price increases didn’t reduce sales volumes much, but the difference was offset by better margins. An improved pricing model contributed to a 10% profitability increase. It also indicated that top performers across industries are nearly twice as likely to price dynamically.

It has been reported that only 18% of B2B companies’ globally, price dynamically.

New Zealand is predominately a B2B net exporter giving sight to an opportunity to address challenges within our industries, such as seasons and their 'effect'?, pricing optimally for festival periods and events 'dynamically', 'maximising' inventory value, launch 'timing' for new products or 'negate' impairment charges because our business models aren’t dynamic enough to foresee events not experienced before, by the industries, organisations or people?

The aspects of a ‘VUCA’ world we now operate within then presents grey shifts or areas to ‘win’, going from reactive to proactive.

By changing our approach to pricing helps us refine our 'competitive advantage' over countries we compete with who either can’t see what new pricing models will tell us, rendering them to only ‘have at a guess’ through the opinions of an experienced few.

Meri kirihimete me mauri ora.

Andrew Watene

Ngāi Tūhoe

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