Pricing in Excel: Your Very Own Black Box of Despair
I know, I know. Everyone these days is harping on about why you should be promoting your pricing out of Excel into some new fancy bells-and-whistles solution.
But to those of us passionate about pricing and helping retailers achieve pricing excellence, it just happens to be a fact: pricing in Excel is holding you back in ways you may not even be aware of. Not because it is bad software – it’s excellent at doing what it was designed to do – but because no one could ever have imagined where pricing would be in 2021, and its very foundations simply don’t live up to the pricing demands of today. Its lack of efficiency, scope and interconnectivity is slowing you down and creating a pricing black box in a world where transparency is becoming paramount.
For those it has served well, we salute your loyalty and resilience, but we believe it’s time to recognize that pricing has moved on. And if you’re serious about remaining relevant, competitive and capturing your true value in the market, then it’s time to accept the truth.
When you’re as deep into pricing as we are, the drawbacks of using Excel are so clear they may as well be flashing neon signs reading “danger, steer clear”. Let’s take a look at some important reasons why.
It Saps Your Best Resources:
Instead of working on profit-driving activities, your pricing experts are burning time doing tedious, monotonous, manual tasks in Excel.
In order to manage prices effectively, first they must pull together scattered transaction data from across the organization, check it twice to catch dangerously frequent human errors, extract what’s useful, import competitive indexes, run a complex calculation on them, and aggregate it all in a spreadsheet in a way that will be useful using VLOOKUP or Pivot Tables.
All this before any actual pricing is done! Not your best use of resources…
Information ≠ Insight:
Only once your pricing people have wasted hours of their time are they able to manually create reports, charts and summary tables to produce anything meaningful. While Excel is able to present information in various types of charts, there is no drill down. You have to use KPIs and metrics to highlight underperformance and run multiple ad-hoc analyses in order to discover business opportunities.
Aggregating the necessary data and extracting actionable pricing insights from Excel is a labor-intensive activity that slows your response to a cut-throat competitive market. When everyone else is working in real time, this leaves you in 1985.
And let’s be honest, by the time the manual efforts are complete, very few companies have the time to put these insights together, so they are simply never done.
The Insidious Black Box:
Aside from the fact your input data is likely already out of date, after many painful hours, you’ve created a tightly secured black box of pricing that only a few people in the organization are really able to understand, replicate, fix or even scrutinize in detail.
A black box is the enemy of transparency. Not only does it confuse customers, but the lack of understanding as to the why’s and how’s of prices in sales breeds distrust and discounts at scale. Margins are undermined without anyone noticing because of how much work that analysis requires.
Data Sources Are Growing:
To make matters worse, mere product and customer data is no longer enough. Your market and customers are much more transparent than they use to be, and retailers need to be connected to multiple internal and external data sources to ensure they’re maintaining relevance.
Good customer insights, actual historical data, exact cost data and real-time inventory data need to be supplemented by competition pricing, index prices, search-engine insights, real-time exchange rates and even local weather data in order for you to achieve value capture.
As if your pricing team needed another layer of complexity added to its pricing processes, it must now find a way of importing a plethora of new data from a myriad different sources and turning it all into insights that support smart pricing.
Excel is a standalone application notorious for not playing well with other systems. Unless your team is supported by very good technical understanding (we’re talking a macros-writing level here), you’re just going to have to take the few minutes of time per month the team has left for analysis, strategy and testing… and burn that too.
Even retailers whose core business is held in their ERPs are struggling because these systems don’t offer the flexibility required to incorporate all this data. So they, too, are having to store it in spreadsheets, meaning all that fancy new data is now siloed, hindering any sort of digestion for pricing purposes.
Stuck in a “work-in-progress” state, you’ll always be playing catch up to the market, chasing an ever-lengthening list of assortments, data sources and channels.
Pricefx: Your Transparency Tool
You need one central pricing hub that instantly imports and merges real-time data from various sources and cleans it up before presenting it to you within an intuitive dashboard in crystal-clear charts and standardized reports so you can quickly and easily generate actionable insights that help you react to the market in real time.
Pricefx delivers a fully integrated suite of tools that helps you manage, analyze, simulate and optimize your pricing in real time across all your channels (including your ERP, store POS and ecomm sites). With all data in one place, it provides a single source of truth for net costs, promotions, discounts, optimizations and competitor prices, where you can easily identify your channels, run ‘what-if’ simulations, and execute optimized value-based and dynamic pricing with ease.
Designed to take you deeper into your data, Pricefx delivers clear visualizations of the complicated relationships between price, promotions and volume across your entire portfolio to help ensure you’re maximizing profit on every deal without cannibalizing profits or customer loyalty.
Built to boost business agility, you can quickly implement price changes in response to fluctuations in the market through automated processes and workflows, and you can leverage historical price and cost data (direct from your ERP) to quickly identify areas needing attention, as well as potent analytics to help you recognize your profit drivers.
Designed to drive profitable growth, Pricefx helps you deliver a customer-first omnichannel pricing experience while simultaneously reducing costs, refining efficiency, reducing risk and boosting value capture.
Recap: Key Reasons You Want to Ditch Excel:
- As pricing technology goes, it falls short of average. It doesn’t offer the flexibility, integration, scalability, security, clarity, efficiency or scope you really need in order to achieve your full pricing potential in the market.
- Pricing people do not come cheap, especially in retail. Giving them monkey work to do is a waste of the time, expertise and results you’re paying them for. Moving to a solution like Pricefx would free them up to be ringmasters – do analysis, run simulations, strategize and drive more profit.
- Excel is the opposite of transparency. Black Box pricing that only a few people understand can lead to distrust and discounts. Transparency is the name of the game, for the market, for your customer and for your pricing, too.
- It’s not 1985. To truly compete in today’s fast-paced retail world, where your competitors are changing prices multiple times a day in response to a myriad of minute market movements, you absolutely need to be working in the real world and in real time.
It’s time to update your software. And deep down, you know it.
Talk to a rep or find out more by clicking on the chat to the right.