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How retailers and brands can avoid the race to the bottom in online pricing

How price competition drives down price 6. MAP monitoring and enforcement actions:In addition to having a strong MAP policy and having it part of any retail-wholesale agreement, brands must also actively monitor and enforce policies when there are violations. While these discussions have to be navigated skillfully, brands that are armed with real-time monitoring and data will have a much better opportunity to negotiate with and change the behavior of violating retailers. For consumers, the retail price wars come down to a strategy of “buyer beware.” Online pricing changes frequently, and across retailers, so they should always shop around to ensure they get the best product to meet their needs at the best price possible. Showrooming plays a huge role here, of course. Almost all of us have found ourselves in a store considering a particular product we like, then whipping out our smartphones to compare prices before making that final in-store decision. That’s not likely to change anytime soon. The takeaway here is the everyday shopper will continue to find ways to be savvy when it comes to getting the product they want at the lowest price possible. However, that doesn’t mean retailers need to feel pressured to constantly undercut their competition. Yes, in the short term that strategy may result in some sales.

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