Do retailers comply with RRPs on Black Friday?

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The RRPs or recommended retail prices are the prices set by a brand as the most acceptable for selling its products or services to the public. During multiple offer events, such as Black Friday, distributors or e-commerce sites may ignore recommended prices to attract more customers and increase the conversion rate. However, this is not always positive for brands. To check if sellers respect RRPs during Black Friday, brands can use recommended price monitoring tools to analyse the selling prices of their products. We explain the benefits and why it is essential. 

As a starting point, you should be aware that, although dates like Black Friday make you envisage a price crash on e-commerce sites, this is not always the case. According to research by Which? on the British online market in 2019, 85% of product prices were cheaper or the same both before and after Black Friday. Just 1% of products surveyed were cheapest on Black Friday, a world away from large companies’ advertising claims. Since advertising campaigns may not be transparent in terms of the implemented pricing policy, brands should track the selling prices of their products in different distribution channels.

The benefits of knowing the distributors’ prices and whether they comply with RRPs 

For brands, information about the actual selling prices of their products is key to making decisions that improve their productivity in the medium to long term. One of the goals will be to rely more on retailers who respect the recommended prices, both on Black Friday and throughout the rest of the year. That is why discovering who is consistent with RRPs and when and investing in them allows manufacturers to: 

  • Maintain consistent pricing across sales channels to improve the user’s shopping experience and increase trust in the brand. 
  • Deliver a strong brand image, as stable prices show that the company is aware of the value of its products. 

In this context, pricing tools enable brands to know how stores comply with their recommended prices. Specifically, the most advanced software allows you to monitor an e-commerce distributor, a price comparison site like Google Shopping or marketplaces, enabling segmentation by zones or postcodes if necessary. In turn, the ability to access data history simplifies analysis of each distributor’s price fluctuations, thus expediting decision-making. 

What can brands do if retailers do not comply with RRPs? 

Occasionally, mistrust can lead the brand to increase the visibility of the RRP through banners or price tags in their product catalogue. This can create conflict with e-commerce sites and affect the corporate image itself, reducing user confidence. To avoid this, one solution available to manufacturers is setting a MAP pricing policy

A MAP pricing policy or minimum advertised price policy is an agreement in which the manufacturer establishes the minimum prices for their products. This is a guide that retailers can rely on to raise or lower prices for events such as Black Friday. Although it is not a binding agreement with legal consequences, it does enable the brand to resort to certain measures if RRPs are not respected. They may terminate the relationship with the retailer or modify the terms of the agreement. This is a way to protect brands, which is key in the highly competitive online market. 

When setting the most suitable RRPs, consider manufacturing costs, expected profit margin and brand image. It is also interesting to consult your competitor’s prices. You can integrate a competitor monitoring tool into your pricing suite to track how your pricing varies and assess what actions to take in your distribution channels. The ultimate goal will always be to increase the profitability of the company.

Maria Jose Guerrero
Content Manager
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