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January 5th, 2023 (Updated 01/11/2023) | 8 min. read

5 Predictions Our Pricing Experts See Coming Up in 2023 

Only those living on a deserted island without quality Wi-Fi access may not have anticipated the potential doom and gloom for the world’s economy coming up in 2023. The headlines are full of record inflation and fuel prices, an energy crisis driving distribution and delivery costs through the roof and the specter of a looming economic recession hanging over the heads of many businesses. Many experts believe a recession is unavoidable and only resilient businesses may come out the other side unscathed. However, rather than get swamped by the despair of the current economic climate, we asked our internal pricing experts to look collectively into their crystal balls and they have produced 5 predictions for businesses in 2023 and the ways that pricing software can help.  

At Pricefx, as a next-generation, cloud-native pricing software leader, we have spent more than a decade answering all manner of pressure points from our customers including assisting them to manage tough economic times, sudden and extreme change and helping them prepare to navigate choppy business conditions. 

“So much uncertainty is likely to impact the level of confidence in people and companies to go back to pre-pandemic spending,” said Gabriel Smith, Chief Evangelist and Head of Solution Strategy at Pricefx. “However, aggressive cost-cutting or reducing strategic investment is the kind of slash-and-burn tactic that seldom works. Avoid letting go of valuable assets that will be key to future growth. The COVID period shows us many examples of industries that have become paralyzed by an inability to ramp up quickly when opportunity returns.” 

With our Chief Pricing Evangelist setting the landscape for the year ahead, let’s dive into 5 predictions that our pricing aficionados see on the horizon for the coming 12 months.  

1. The Direct-to-Consumer Future for the Manufacturing Industry 

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For manufacturers, the ability to better control the performance of their pricing and doing away with annoying middle-man channels to consolidate their relationships with both their B2B and B2C clients directly should be a highlight in 2022. To learn more about the ways B2B businesses can learn from B2C methods and sales channels, check out this great article from Pricefx’s own Jochen Schmidt here:  

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In the Manufacturing Industry specifically, the transformation is expected to lean into the creation of new products and market offerings that require a smaller footprint, a divergence from competing with larger brands and reimagining a boutique-like approach to capture demand, leveraging into more into value-based pricing. 

The result should be a strategy that will facilitate shorter and more easily negotiated pathways between manufacturers and consumers. 

To learn more on the best ways that the Pricefx pricing software solution can assist manufacturers, check out a handy article from Pricefx Solution Strategists, Sara-Marie Gansert and Iain Lewis by clicking on the image below: 

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2. Distributors Could See Total Transport Costs Decrease While Fuel Costs Rise 

In 2023, distributors should expect to see total transport costs decrease due to market overcapacity in the market combined with dwindling demand for shipments. On the flip side, fuel costs are expected to remain high. It all appears set to add up to a scenario whereby shipping rates are expected to undergo a first half year drop and not bounce back until the produce season begins in the latter part of the second quarter of 2023. 

Backlog should continue strong through the first half of 2023 at the very least. However, looking at the bigger picture, distributors should be expecting that much of the backlog is delivered, leaving with inventory purchased at a higher cost while their manufacturing counterparts are lowering their purchase price to move their inventory out of the warehouse and into the hands of customers.  

To learn more how Pricefx can assist Distribution Industry players with achieving their businesses objectives, check out another great article by our very own Iain Lewis: 

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3. Overcoming Market Volatility by Leveraging Maximum Price Optimization 

Regardless of the industry sector of your business, market volatility is not expected to stop anytime soon throughout 2023. Sure, if your production costs are affected by the market indices of raw materials then you might expect more volatility than other industry sectors. Thankfully, the costs of many raw materials have begun to come down from their 2021-22 all-time highs. But if we have learnt nothing else from CoVid-19 and the Russian invasion of Ukraine, it is to expect the unexpected. Raw material prices are trending downwards but remember that they are on the way down from all-time highs. Markets worldwide have become far more dynamic than they were prior to the start of the global pandemic. 

What that means for your business is that you will need to become more time effective in setting your prices and managing and maintaining your price lists. Pricefx is seeing companies execute 5 to 10 times more price changes than they previously did back in 2019 Taking that one step further, organizations investing in price optimization software will be best placed to outperform the market and their competitors. Consequently, they will be significantly more likely to use value pricing to add important additions to their bottom line profit. 

To get a complete overview of price optimization software and how it could potentially assist your business, check out Sara-Marie Gansert’s comprehensive guide here: 

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4. Mergers and Acquistions Expected to Increase in 2023 

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Many companies have been well-placed to profit from the dynamic market changes that have been at hand over the last 3 years, frequently at the expense of those businesses that for one reason or another may have struggled. 

Creating a perfect storm for mergers and acquisitions to become more common, it is expected that the value of those companies that have failed to adapt may decline further in 2023. 

Cashed-up organizations are well-placed to take advantage of the bargains available to potentially go on buying sprees. 

For those companies looking to pivot pricing strategies after a merger is done and dusted, check out this handy article from Pricefx Solution Strategist, Idrissa Diop: 

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5. Pricing Technology Will Widen the Gap Between the ‘Haves and Have Nots’ 

As discussed above, if anything market volatility is expected to increase in 2023 rather than fall away. With that being the case, the gap between those companies with a next-generation pricing software tool and those without is expected to widen. 

Organizations with their pricing software ‘ducks in a row’ might be expected to emerge more profitable than their peers in 2023. By their very nature, market disruptions make for winners and losers, and the difference between which column your business ends up in will depend upon getting your pricing right.  

“Businesses should avoid common traps and remain disciplined,” said Garth Hoff, Director of Industry Strategy at Pricefx. “Avoid the ‘see what sticks’ approach and instead focus resources on targeted investment in R&D and strategic acquisition in a broad context. Executives should not get stuck in analysis paralysis. Now is the time to act and be decisive.” 

Underperforming organizations will probably be sticking to familiar manual pricing techniques and often bad behaviors in times of crises. On the other hand, those companies using the power of a simple data-informed 1% price rise may see an increase of up to 11% more profit for their businesses. 

To learn more about the unlocking the power of the 1% in your organization’s pricing, check out this informative video from Pricefx’s Chief Sales Officer, Tim Shorter: 

Recession-Proof Your Business 

Now you know our pricing experts top 5 predictions for what could be a rocky year ahead in 2023. 

If you are looking to do more for your company than merely ride out the storm of the anticipated choppy year ahead, then you will want to adopt an award-winning and real-time automated pricing solution like Pricefx. The possibility of slow price list updates and leaving money on the table is unthinkable, particularly when money is tight. 

If your business already knows that a total pricing solution will assist your organization, this article below can help you finalize your pricing software choice;  

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On the other hand, if you like what our Pricefx experts have to say and feel that our solution is right for your business, talk to us today:  

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About the Author 

Ken Edwards has many years of experience as web content writer, from the dawn of time of the internet through to the current day. Included in this are varied topics from scuba diving travel, Australian Government Health & Ageing Policy Initiatives, Online Casino and Sports Betting, Vehicle and other Asset Finance, financial legislation and regulations, and now to AI-informed pricing software with Pricefx. When he is not busy writing, you will usually find him hiking somewhere in Europe with his wife Lucie and his dog Max.