Episode 35
Retail Tech Can't Replace Retail Strategy
Hi, I'm Clare Bailey, founder of Retail Champion.
Let me tell you about an email that made me lose trust in a brand overnight. I'd bought several pairs of shoes online. Two days later, a cheerful 50% off email landed in my inbox — for the exact pairs I'd just bought. No acknowledgement. No credit. No apology. Just a pricing algorithm doing its job, and a customer (me) quietly deciding I'd never shop there again.
That's the quiet war playing out in retail right now — and it's what this episode is all about.
This is Part Two of our three-part mini-series on discounting, data, and escaping the middle market trap. In this episode, I unpack what I'm calling the retail battleground: the tension between data-led pricing, automation and customer trust. Because tech is powerful. But the moment it starts overriding human judgement, it begins eroding the one thing retailers can't afford to lose — trust.
What We Cover
• Why pricing is no longer stable — and what that does to customer perception
• The difference between logical discounting and "wobbly" pricing that feels unfair
• How AI, dynamic pricing and electronic shelf-edge labelling can quietly cross the trust line
• Why data is a tool, not a strategy — and the costly mistake of confusing the two
• The three anchors every retailer needs right now: clarity, consistency and control
• Why your brand is not a system output
Key Takeaways
• Trust is slow to build and devastatingly fast to lose
• Data should guide decisions, never replace experience, instinct and judgement
• Fairness is quietly becoming one of retail's rarest — and most powerful — competitive advantages
• Pricing logic matters as much as the price itself
• Retail has never been about transactions. It's always been about relationships
Resources & Links
• Free retail playbooks: www.theretailchampion.co.uk/retail-playbooks
• Newsletter & Clarity Scorecard Quiz updates: www.retailreckoningpodcast.co.uk/newsletter
• The Retail Champion: www.theretailchampion.co.uk
• Other episodes: www.retailreckoningpodcast.co.uk
• Subscribe to Retail Reckoning wherever you get your podcasts
Connect & Share
If this episode made you look differently at your pricing, data or tech stack, I'd love to know. Leave a review, share it with a fellow retailer, or come and find me on social. Let's keep the conversation going.
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Transcript
Tech is great, but it can't really replace retail strategy and that
Speaker:human touch that makes the world of difference. And if that does happen,
Speaker:you're risking losing customer trust along with their loyalty and spend
Speaker:I'm going to unpack this in this episode, which is part two of a three
Speaker:part series focusing on discounting data and how to
Speaker:escape the middle market trap.
Speaker:So if you heard episode one, you may or may not know that this three
Speaker:part series is going to be supported by a free downloadable resource
Speaker:and a free retail clarity quiz with some
Speaker:recommendations and follow up, but I'll explain more about that at the
Speaker:end. This episode particularly focus on what I'm
Speaker:calling the retail battleground. It's the healthy tension between
Speaker:pricing data and trust. Now to recap, in the
Speaker:last episode talked about the uncomfortable truth that cheap is
Speaker:winning. And what that really means is margins are under so much pressure
Speaker:across every part of retail. But then there's a second layer, isn't
Speaker:there? Because if pricing pressure is what you see on the surface, what's
Speaker:happening underneath is much more structural. And we covered the fact that pricing is
Speaker:changing. It's not just about promotions and markdowns, but it's about the
Speaker:way that the customers are making decisions in the first place.
Speaker:And that's where we have to start taking that mental
Speaker:shift from retail as we know it to something more complex.
Speaker:And we're going to explore that shift. There's a lot of stuff out there
Speaker:about data LED pricing, dynamic systems,
Speaker:shelf edge labeling that mean that you can do real time
Speaker:price optimization. And we all know it happens in travel
Speaker:with flights and trains, but it isn't really something that happens
Speaker:typically in retail. Now all of this has been designed to improve
Speaker:performance, but it raises a really important question. What
Speaker:happens to consumer trust when pricing stocks feeling
Speaker:predictable? I'll give a little example. I happened to buy some shoes
Speaker:online a couple of weeks ago and a few days later
Speaker:I got an email now that I was subscribed to their email list telling
Speaker:me that two of the pairs I'd bought were 50% off. And I
Speaker:was like to be honest, if you're going to discount something that
Speaker:suddenly, then perhaps it would be nice to have said and because
Speaker:of that we're giving you a credit because we know you've only just
Speaker:bought some. But that didn't happen. And I covered that in a topic
Speaker:about the Boxing Day sales in a podcast previously
Speaker:about how it's really hard to get customers
Speaker:to trust that the price isn't going to drop and to part with their
Speaker:money because they expect pricing to move
Speaker:around. Now, when we get to the final episode of this series, I'm going to
Speaker:pull all this together. But it's all to do with pricing is changing and the
Speaker:pressure on businesses is rising and it results in
Speaker:quite a few ending up something that they didn't intentionally choose to be
Speaker:kind of stuck in the middle. And at the end of this series, we are
Speaker:going to talk about how to fix that.
Speaker:But first I'm going to dive into what's actually changing.
Speaker:So everybody knows smart pricing is becoming much more
Speaker:available. And pricing has always been part of
Speaker:retail positioning and marketing. But historically there's been
Speaker:sort of a, they call it in supermarkets, the known value item.
Speaker:It was relatively stable. People know what to expect to pay
Speaker:for something and they don't expect it to jump around from
Speaker:day to day or hour to hour. And it was clear
Speaker:you set the price. Maybe you ran a promotional remarkdown
Speaker:occasionally and there might be strategic promotions
Speaker:with suppliers and bundle deals and so on. It was relatively
Speaker:straightforward. But now if that model has entirely changed,
Speaker:we're moving into the world where pricing is more
Speaker:data led, customer behavior,
Speaker:analytics influenced. Gosh, that's a hard sentence to to
Speaker:say system generated and
Speaker:potentially continuously optimized, which
Speaker:is exactly what we see with the price of flights and trains and things like
Speaker:that. From a business perspective, of course it's powerful.
Speaker:It means that you've got much better margin control,
Speaker:a more rapid and data led or almost
Speaker:automated reaction to fluctuations in demand,
Speaker:much more efficient stock flow and movement, and
Speaker:much more responsive trading decision. But if you take the personal
Speaker:out of that and the human touch and allow, for example, AI
Speaker:or similar to run pricing and promotions in order
Speaker:to stimulate demand or pull demand back, if you're running low on
Speaker:stock and so on, then it rather
Speaker:confuses customer because on paper it
Speaker:sounds great. But retail is actually much more human than that.
Speaker:It's not just an Excel model or a dashboard. The fact is,
Speaker:and it always has been, that relationship between the business and the
Speaker:customer. And when you start to let too much go under
Speaker:automation and not necessarily sanity check it, that's where the
Speaker:tension begins.
Speaker:Because what the customer experiences is not the optimization
Speaker:and the margin growth that the retailer experiences, they just
Speaker:experience the price and they look at that with just
Speaker:one single focus, I guess, and it's fairness.
Speaker:And fairness is fundamental to trust. And nobody wants to feel that
Speaker:just because I went shopping at 10 o' clock in the morning, I've ended up
Speaker:paying 20% more for my basket than the person who went out at 4 o'
Speaker:clock in the afternoon. Discounts that we see when it's something coming to end
Speaker:of shelf life are acceptable. But where you've got electronic shelf
Speaker:edge and prices of baked beans flitting about,
Speaker:then you have to start questioning, is that fair? And I think
Speaker:this is where it could be that some of the tools and
Speaker:technologies enable retailers inadvertently to sort
Speaker:of cross the trust line. And this is what really matters. Because,
Speaker:yes, customers are rational and price sensitive, but they're not
Speaker:only rational decision makers, they also have the
Speaker:emotional interpretation of value and experience. So
Speaker:clear pricing logic, what I just said is coming to the
Speaker:end of shelf life and therefore it's being reduced to clear so it doesn't end
Speaker:up in the bin. That's logical, predictable value. So
Speaker:if you buy something regularly, you have a very strong idea about what it
Speaker:might cost. Yes, we understand that inflation takes things up,
Speaker:but it's when things bounce around and I guess they do accept
Speaker:occasional variations. So it might be on a promotion or it might be a special
Speaker:deal or a bundle, but anything
Speaker:that feels, you know, inconsistent, unclear,
Speaker:wobbly, if the price is moving around too quickly,
Speaker:they're likely to question it. And if two people were going to pay
Speaker:different prices for the same product and then they spoke to each other,
Speaker:they would notice. It's a bit like the advert I've seen lately,
Speaker:and that's, again, it shows dynamic processes of pricing
Speaker:in travel. I think it's the Trivago one where you've got three
Speaker:different people and one is paid considerably less
Speaker:because they use the Trivago app. Now, there's an
Speaker:argument to say the price should be standardised, but
Speaker:the difficulty with travel is, of course, you need to saturate
Speaker:your accommodation or fill up all your seats, whereas
Speaker:with supermarket goods, we know there's a flowing supply chain and
Speaker:similar with clothing, it's not quite the same thing. But even then, in that
Speaker:advert, they highlight the point that the person who's paid
Speaker:more is disgruntled and feels that perhaps
Speaker:they've not got value. They were happy with their price up until they found that
Speaker:somebody else had got it cheaper. And I think that that's the issue.
Speaker:If pricing in retail begins to go down the same
Speaker:way as it can be in travel, it might lead people
Speaker:to sort of disengage with the brands and
Speaker:feel that they're not confident what they're getting. It
Speaker:might push them to shop around more or to even
Speaker:just walk away. And you see, once that's happened. The
Speaker:trust has moved. And trust isn't automatic.
Speaker:I'd say trust is not a soft metric either.
Speaker:It is the foundation of loyalty and repeat behavior and of course
Speaker:repeat spending. It's quite slow to build
Speaker:that trust, but it's very fast if you want to lose it.
Speaker:So despite the fact I like to think of myself as someone
Speaker:who uses data to make decisions and can
Speaker:do a range review based on margin, I also understand that
Speaker:there are certain other indicators that you need to consider
Speaker:as a decision maker in a business.
Speaker:Data is not your store strategy. And I think that's where a lot of
Speaker:businesses might be heading in the wrong direction. The belief that
Speaker:more data, and particularly automation can lead to
Speaker:better outcomes. But I don't think it does. Not every single time.
Speaker:Data's just a tool and I totally commit to
Speaker:my love of data. It's a very powerful tool. But
Speaker:what really matters is also how you interpret it. You need
Speaker:the experience and some of the instincts around
Speaker:that the data can guide and steer and
Speaker:you still can make the wrong decision. You can have all the dashboards in the
Speaker:world, insights, exception reports, real time reports.
Speaker:And if you haven't got the right knowledge and skill and
Speaker:instincts and even some of the gut feel that really matters,
Speaker:then you can still make worse decisions with more data
Speaker:if you interpret it wrong or if your customer perspective
Speaker:is missing one example and it's not on pricing, it is on range
Speaker:reviews is you might have a product that makes negligible margin
Speaker:and only has a trickle of sales, but if that product
Speaker:repeatedly ends up in the basket of some of
Speaker:the most high spending loyal customers whose total basket value is
Speaker:super high margin, then you wouldn't cull the product.
Speaker:But if the product was just a dead leg, you would. But that's where going
Speaker:a bit deeper really matters. And the system won't necessarily be able to
Speaker:decide that for you. So I think that sometimes
Speaker:internal optimization can override the
Speaker:common sense and judgment that you develop over time
Speaker:as a retail professional. So I think that's really the most
Speaker:important thing. The risk is trusting the data more than
Speaker:judgment. And the faster decisions and the automated
Speaker:decisions are not always the best. So if I was to talk to a
Speaker:retailer right now about what they should focus on,
Speaker:I would be saying, well, how do you navigate this? Obviously we're
Speaker:not going to reject the data, but you can't blindly follow
Speaker:it. And I would say there are three key things
Speaker:to really anchor decision making too. First
Speaker:is clarity. The customer needs to understand what you stand for.
Speaker:Covered that in Episode one as well. Even if pricing
Speaker:changes, the value proposition should not feel unstable. It
Speaker:should still feel clear and relatable
Speaker:and trusted. And then second, consistency.
Speaker:There's no need to have fixed pricing everywhere.
Speaker:And I know for a fact that, you know, you can buy in a
Speaker:supermarket in one area, something for a lot less than in
Speaker:another area. And quite a lot of the time it's to do with it being
Speaker:a convenience store or it might be in a train station. And you know,
Speaker:the pricing is variable according to the location,
Speaker:so you don't have to have fixed pricing everywhere. But consistent pricing
Speaker:logic is really important. Customers
Speaker:need to be able to make sense of the pricing and think, oh well,
Speaker:it costs a bit more here, but I guess it is a railway station or
Speaker:an airport and the property is probably a
Speaker:premium or whatever, so they can rationalize that.
Speaker:But if it's the same store and prices are bouncing around throughout the day
Speaker:just because of demand and forecasting algorithms,
Speaker:that's not consistent. And then third, I think
Speaker:control, and I kind of touched on it, but I
Speaker:would not want to allow my business
Speaker:positioning to essentially be outsourced to
Speaker:systems. In so much as I wouldn't let
Speaker:AI make decisions for me or any other tool.
Speaker:It needs to be rationalized, validated and humanized.
Speaker:Yes, of course, data is really important to inform decisions,
Speaker:but it can't replace your judgment. And ultimately
Speaker:your brand is not a system output. It's
Speaker:much deeper than that. It's the set of decisions that still
Speaker:need human ownership. And it's that essence, that
Speaker:personality, that DNA that makes
Speaker:customers feel that trust and remain loyal. I mean,
Speaker:I guess it always comes down to what I said earlier. Retail has never been
Speaker:anything about just transactions. It's always been
Speaker:about relationships. Even if you don't know the customer in person,
Speaker:you understand who they are and what their needs and wants are, and
Speaker:you go out of your way to predict them with right products in the right
Speaker:places at the right price. It's all the P's of marketing and
Speaker:relationships always depend on trust. So I
Speaker:would say using data to improve efficiency is one thing,
Speaker:but not to the nth degree. And that's the
Speaker:point about long term success. The customer has to believe that pricing
Speaker:is fair. In a world where pricing on many other things
Speaker:is much more dynamic and automated, it's also less visible.
Speaker:Fairness might even become your competitive advantage in its own
Speaker:right, and not because it's particularly cool.
Speaker:I mean, I would say it's the fundamentals of any customer relationship. But the
Speaker:thing is, it's becoming increasingly rare.
Speaker:So to wrap up, let's bring this back. In episode one, I
Speaker:talked about price pressure and the rise of discounting. In this
Speaker:episode we've looked about how pricing is evolving behind the scenes with
Speaker:the use of automation and AI and various other tools and technologies.
Speaker:And these forces are leading in many respects to a
Speaker:similar outcome. Because when the pressure inside the business increases
Speaker:and pricing decisions become more complex, a lot of
Speaker:businesses can end up in a position they didn't really deliberately choose.
Speaker:And they're not the cheapest, not the most premium stuck somewhere
Speaker:in the middle. And that's exactly what we're going to cover in the next and
Speaker:final episode of this mini series. Because the middle is not just
Speaker:a description, it's a problem. But importantly,
Speaker:it's fixable. So if you've enjoyed this episode, we do
Speaker:have a couple of resources linked to it. There are playbooks
Speaker:available that offer deep dives into various essential topics, but
Speaker:we do have a free downloadable one for these three
Speaker:parts of the series, and they're at retailchampion.co.uk
Speaker:retail-playbooks or if you subscribe to
Speaker:receive podcast updates via email through
Speaker:retailreckoningpodcast.co.uk newsletter.
Speaker:We'll also be able to update you when more of those resources go live.
Speaker:And a number of them will be free. Some of them won't be. And then
Speaker:finally link to this about the clarity, consistency, pricing and everything else. We've
Speaker:devised a Retail Clarity Scorecard Quiz. So
Speaker:we'll be able to let you go through a simple quiz on
Speaker:the website and you'll be able to receive personalized
Speaker:recommendations based on your answers. And if you've subscribed to
Speaker:the newsletter, I'll send you the URL to that in due course.
Speaker:So hopefully, if this has provoked any thoughts and you want a no obligation
Speaker:chat with me, you can contact me on
Speaker:championetailchampion.co.uk, or or drop me a WhatsApp
Speaker:message on 07462218000
Speaker:and I'd be delighted to have a discussion. This has been Retail Reckoning.
Speaker:My name's Claire Bailey, the Retail Champion. Thanks for
Speaker:listening.
Speaker:Retail Reckoning no space for
Speaker:dusty shelves cause Retail
Speaker:reckoning owns the floor.
Speaker:Sam.
