Disruptive developments brought on by the pandemic impacted distributor price management for the short-term, but may also permanently alter key aspects of pricing moving forward, says consultant Lee Nyari.
Posts By Lee Nyari
No two distributors are fully alike in the characteristics of their businesses and their pricing environments.
With advances in tools and technologies to help mine larger and larger available datasets, algorithms are increasingly used across many business functions. However, if not managed appropriately, too much of a good thing can backfire. This was the message of a recent Wall Street Journal report by Deloitte, On the Boards Agenda: Board Oversight of Algorithmic Risk. This article, the first of a two-part series by Lee Nyari, examines the dangers that Deloitte outlines in its report and offers distributors some solutions for reducing algorithmic risk in price management.
This article includes:
- Pricing as a useful and powerful business lever in distribution
- Why pricing algorithms may be insufficiently market-informed
- Updating approaches for developing pricing algorithms
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- MDM-Baird Distribution Survey: Storms Stunt Distributor Growth
- Distributors Up Search Marketing Efforts
- Amazon Business: The Burning E-Platform
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Part one of this two-part series discussed how Deloittes views on algorithmic risk management generally apply in distribution pricing, and key strategies to consider in managing pricing algorithms. This article, the second and final part of the series, illustrates how some of these issues play out in real-life distribution pricing projects, and offers relevant learnings from successful pricing transformation initiatives.
This article includes:
- Signs of algorithmic risks
- Evaluating the threat
- Common reasons that pricing algorithms underperform
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Not a subscriber? Subscribe below or learn more. Subscribers also have access to the following related articles:
- MDM-Baird Distribution Survey: Storms Stunt Distributor Growth
- Distributors Up Search Marketing Efforts
- Amazon Business: The Burning E-Platform
To access this page, you must purchase MDM Premium Subscription, MDM Premium Subscription – Monthly or MDM Premium Subscription – Annually.
With advances in tools and technologies to help mine larger and larger available datasets, algorithms are increasingly used across many business functions. However, if not managed appropriately, too much of a good thing can backfire. This was the message of a recent Wall Street Journal report by Deloitte, On the Boards Agenda: Board Oversight of Algorithmic Risk. This article, the first of a two-part series by Lee Nyari, examines the dangers that Deloitte outlines in its report and offers distributors some solutions for reducing algorithmic risk in price management.
This article includes:
- Pricing as a useful and powerful business lever in distribution
- Why pricing algorithms may be insufficiently market-informed
- Updating approaches for developing pricing algorithms
Subscribers should log in below to read this article.
Not a subscriber? Subscribe below or learn more. Subscribers also have access to the following related articles:
- MDM-Baird Distribution Survey: Storms Stunt Distributor Growth
- Distributors Up Search Marketing Efforts
- Amazon Business: The Burning E-Platform
To access this page, you must purchase MDM Premium Subscription, MDM Premium Subscription – Monthly or MDM Premium Subscription – Annually.
This report, now available in PDF format, is a benefit for MDM Premium subscribers. Simply log-in below to access and download this series of articles. Not a subscriber? Subscribe below.
W.W. Grainger Inc.’s new web pricing strategy was launched to reverse unfavorable market share trends Grainger experienced in certain market segments in recent years, but it also had the side effect of driving down the company's margins for the short term. This series analyzes the results of the strategy so far and the challenges Grainger faces in implementing its pricing approach. It also offers tips for how other distributors can improve their pricing strategies in the internet age.
Articles included in this special report:
- Pt. 1: A ‘Suboptimal’ Solution?
- Pt. 2: The Quest for Optimization
- 6 Lessons for Other Distributors
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What can other B2B distributors learn from watching Grainger’s pricing story unfold? Three tips for distributors.
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- Distribution M&A Playbook, pt. 2: The 8 Fatal Flaws in M&A
- Top Trends for 2017
- MDM Interview: Watsco Aims for ‘Bigger, Better, Faster’
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Since the January launch of its pricing initiative, Grainger has seen significant declines in profitability. While this margin trend is expected to reverse in 2019, its existence may signal that the pricing process Grainger is pursuing is less than optimal. This article, part 2 in a series, analyzes the challenges Grainger faces in implementing its pricing approach and provides additional lessons for other distributors looking to improve their pricing strategies.
This article includes:
- What we know to be true
- Are Grainger’s web prices more optimal?
- Did Grainger miss the boat?
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Not a subscriber? Subscribe below or learn more. This article is available for purchase as a special report.
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What can other B2B distributors learn from watching Grainger’s pricing story unfold? Three tips for B2B distributors.
Subscribers should log-in below to read this article.
Not a subscriber? Subscribe below or learn more. Subscribers also have access to the following related articles:
- Distribution M&A Playbook, pt. 2: The 8 Fatal Flaws in M&A
- Top Trends for 2017
- MDM Interview: Watsco Aims for ‘Bigger, Better, Faster’
To access this page, you must purchase MDM Premium Subscription, MDM Premium Subscription – Monthly or MDM Premium Subscription – Annually.
As of Aug. 1, W.W. Grainger Inc.’s new web pricing strategy was to be effective for all 1.5 million SKUs on its website. The pricing strategy was launched to reverse unfavorable market share trends Grainger experienced in certain market segments in recent years. Part 1 of this two-part series looks at how the pricing initiative has played out to this point, along with lessons other distributors can learn from Grainger’s experience.
This article includes:
- W.W. Grainger Inc.’s new web pricing strategy
- How the pricing initiative has played out to this point
- Lessons other distributors can learn from Grainger’s experience
Subscribers should log-in below to read this article.
Not a subscriber? Subscribe below or learn more. This article is available for purchase as a special report.
To access this page, you must purchase MDM Premium Subscription, MDM Premium Subscription – Monthly or MDM Premium Subscription – Annually.
How to bring your pricing into alignment with e-commerce.
Your typical approach to pricing may not be effective online.
