Price Optimization Testing at Wal-Mart

On a trip to Wal-Mart this week, I found the same item featured in three different places in the store.

This item is not available at Wal-Mart.com.


Wal-Mart clearly states that pricing will vary between the website and stores, and will vary between stores.  The website does not say that prices will vary on common items within the same store.


Ok, you are the marketing expert, so it is time for your thoughts.

1. What do you think of a brand executing price optimization testing with a store?  Do you execute price optimization tests?
2. What do you think of a brand not offering a comparable item online?  Does this diminish the fabled "multi-channel customer experience"?
3. We can see how this type of testing benefits a business ... what do you think of this strategy, from a customer standpoint?
4. How would you handle the pricing changes at checkout ... do you charge the customer $6.00, $5.97, or $5.24 per the signage, or do you charge each customer $5.24, regardless where the customer purchased the item within the store.
5. Does a company have any responsibility to communicate that it executes multivariate price testing?
6. In a mobile/social era, how would you balance testing strategies with the fact that customers can easily identify and share your testing strategies with their "social graph"?

Discuss.

Wal-Mart Black Friday Opening Turns Fatal

We encourage this behavior with our discounts, promotions, and advertising featuring "doorbusters". Then folks actually bust down the door, ending a life. In some ways, we marketers need to consider our level of accountability here.

Look at some of the behavior we encourage, all so that we can make a few extra dollars of profit. And what if we're losing money on these promotions?

Promoting Non-Competing Brands In E-Mails, Catalogs, And Homepages

Alaska Air used their e-mail channel to promote a wine club.

REI is promoting ten songs in a recent e-mail campaign.

Per Alan Rimm-Kaufman, Wal-Mart ran ads for Presidential candidates on the homepage.

We used to be known as catalogers or retailers. Then we were labeled "multichannel". And now we're slowly becoming media companies.

When we become a media company, we have a new set of responsibilities. We ask ourselves new questions. Maybe the most important question is "What is the nature of the relationship between customer and brand?"

If the customer and brand jointly believe that it is acceptable for the brand to introduce wine and music to the customer, then the brand can further monetize the customer relationship, and the customer can theoretically benefit from new offers.

More important, we cannot trade short-term revenue for long-term customer mistrust.

Increasingly, we're going to be asked for access to an e-mail list of a million customers, or for access to a mailing list of four million customers --- we're no different than a network television executive looking to monetize a thirty second spot on The Office. We have an audience, we're like a television or cable channel. Brands want to get a message in front of our audience. Do we protect our customers, or do we open the door? And when we open the door, do we open it a crack, or is it wide open?

And as response rates plummet, the temptation to take the money will become greater.

Executives and customers will have to make joint decisions here, decisions that shouldn't be made solely in a board room.