Ruth N. Bolton and Venkatesh Shankar
Retailer pricing is a key element of retailer strategy that critically shapes retailers’ fortunes. Many retailers live and die by their pricing strategy. This chapter reviews emerging retailer pricing trends and offers guidelines for profitable pricing strategies. It begins by describing the current retailer environment, focusing on how changes in consumer demand, competition and cost over the past decade have created pricing opportunities and challenges. It then discusses how new forms of competition (from adjacent markets, discount outlets, resale stores and the sharing economy); changes in consumers’ shopping habits across different channels and touchpoints (including shopper response to increased direct-to-consumer activities by manufacturers, growth in online intermediaries and multi-channel or omnichannel retailing); and technological changes (including the pervasiveness of mobile services) affect retailer pricing. After reviewing current pricing practices, the chapter closes by offering a framework to guide retailers in developing a coherent pricing strategy.