Should retailers formally move to Differential Pricing?

If I ask most retailers do you believe that a product should have a different price in a London store as opposed to a store in Sheffield, the answer is invariably no. Retailers believe it is part of their brand promise that the product will have the same price whichever store you buy it from.

My question in this is why? Why is that important?

Could you not turn around to customers and say openly and honestly, look the rents are higher in London, staff costs are higher and distribution costs are higher, so prices have to be higher?
More importantly if I was a shopper in Sheffield, would I not want to know why the prices are not cheaper, particularly as consumers have lower incomes in Sheffield than in London.
Would it be an advantage to a retailer if they could use differential pricing? It would certainly allow margin and stock optimisation to a level that is not possible today.

Differential pricing has taken hold in Spain and Portugal, but not elsewhere in Europe, are they the vanguard of things to come or are they just different? Are UK retailers doing differential pricing but just up front about it with their customers?

We know retailers will offer the same product under different “fascias” at different prices.

What about consumers? The likes of Easyjet are certainly preparing us for differential pricing (of a slightly different form) with a vengeance. We all go onto the Internet and notice that prices for a product are different. So we realise that prices are not always the same? There are plenty of price comparison sites.

So is the retail consumer not ready for differential pricing?

Give us your views.

Is the iPhone the new retail loyalty card?

As mobile phones continue to evolve into personal computers, more and more interaction with people will migrate onto these devices.

Just take the iPhone, using the browser on the phone is really easy, because you can zoom in to the relevant section. The vast majority of iPhone applications allow you to do a lot more in the way of interaction. There are apps like Opentable that allow you to find restaurants in your vicinity that have availability and then book tables, you can book railway tickets on it, you can look up stock prices and do trades from it and even scan barcodes and check online retail prices with RedLaser’s new app.

What is more the iPhone will soon loose its uniqueness. Google’s new Android phones will have similar capabilities. Nokia with their use of Symbian, Windows Mobile and other mobile operating systems will provide similar capabilities. So the volume of applications for mobile phones will increase.

It is clear that the trend set by Apple will grow into Tsunami.

Every person using a mobile phone will have a unique identifier, globally. If retailers could have access to that unique identifier, they have a universal platform for communicating with every person, through their phone.
It is very feasible today and I have seen demonstrations of a mobile phone becoming a loyalty card.

Imagine, when you buy a product at a retailer, they scan the phone Id, and that purchase is attributed to you. The retailer can send you your loyalty points based on your purchases to your phone. You can then redeem those points in-store or online.

The retailers could do a lot more. They can send you your receipts, individual communications, promotional vouchers, new product information all directly to your phone.

What I really like, is that the phone will allow you to communicate to the retailers anonymously until such time as you want to reveal your full identity. So it is the ideal mechanism for permission-based marketing.

So do you believe the mobile will become a new loyalty card? Let us know what you think?