Pricing wars: weekend warriors

Best practices in price monitoring 27.4.2015. Reading Time: 2 minutes


With ever-growing market competitiveness (mostly due to young, emerging online stores who try to make their way with cheap pricing, with extremely low margins) we have noticed a new phenomenon – prices going down on Friday evening, and up again on Monday early AM.

During our visit to Pro Light + Sound trade show in Frankfurt – we have confirmed this phenomenon with several musical brands – who observed it in last couple of months.

It typically works like this:

  • A young and aggressive online retailer, wants to attract more sales
  • The best way to do so is by lowering the price margin
  • On the other hand the price shouldn’t go too low – usually the manufacturer wants the retailer to observe minimal agreed price (MAP, MSRP)
  • The retailer knows that big brands use automated services to detect price changes on retail sites
  • However, the retailer also knows that on weekends there is no-one in brand’s marketing office
  • Thus on, Friday evening, the retailer lowers the price: sometimes just for a couple of products, sometimes across the whole brand range
  • In certain industries (especially music industry) customers are more active on weekends – and such price cuts usually result with significant sales peaks.
  • On Monday morning – the retailer moves the price back up
  • When brand’s pricing department contacts them on Monday (because they have detected weekend price cuts) their story is either
    • sorry, we had a misunderstanding, the prices are back to normal now, or
    • sorry, we had a glitch in our software, but there was no one in the office to fix it, or
    • sorry – I had to do it, since everyone else does it as well
  • There are even (rather comical) situations where retailer actually does perform automated price cut on Friday PM – but his software is not smart enough to get prices back up on Monday AM. In this case the retailer gets caught red-handed 🙂

What kind of advice can we offer?

  • You need a reliable tool in order to to document ‘dirty pricing tricks’ performed by such retailers
  • The tool also needs analytical features – so you can analyze retailer’s behavior over past weekends, and draw some conclusions from it
  • Do let your retailers know that you’re familiar with such tricks, and that you have methods to fight them
  • Arm yourself with a lot of patience 🙂
  • Try not to work weekends (unlike myself 🙂 )

Good luck fighting weekend warriors!