Study Finds Pricing Errors at Wal-Mart

The LA Times notes a study that found pricing accuracy in many Wal-Mart stores below federal requirements. The study was funded by a union critical of the Arkansas giant, but researchers found more under-charging than over-charging. (Most previous studies of this type indicated more over-charging.) Guidelines require 98% accuracy on randomly selected items. Most of the Wal-Marts in the study were well below that level.

Keeping prices properly synchronized is a challenge for any large business, but a company like Wal-Mart has a larger challenge than most, with extremely high SKU velocity and frequent price changes, even with Every Day Low Pricing. Some retailers have experimented with digital shelf tags that update automatically with price changes, reducing the cost of price changes. The cost of these systems, however, has prohibited their widespread adoption.

The thing that I find funny is that many companies seem to lack any form of price testing. Companies with an assembly line have to measure defects. Companies measure customer satisfaction. But most companies don’t systematically measure pricing accuracy.

Pricing errors are expensive. Under-charges often don’t get reported. That money just goes away. Over-charges eat valuable customer goodwill and require a lot of (manual) work to fix.

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