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Monday, December 6, 2021

Why Do Retail Suppliers Need MAP Monitoring?

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MAP stands for the minimum advertised price. It refers to the lowest price at which retailers can display or promote a product.

If you go through multiple e-commerce websites, you will notice that a particular product’s price is relatively consistent and does not go below a specific figure. Nonetheless, you may not know that this is mainly because the suppliers have a MAP agreement with the retailers.

Unfortunately, increased internet penetration has facilitated unauthorized retailers’ entry into the e-commerce business, some of whom lower product prices below the MAP. Such dealers resort to undercutting to compete with the big players. Usually, though, this has disastrous effects on retail suppliers.

Picture this. Supplier A stipulates their product’s MAP should be $2000. Authorized retailer R will display this amount or a slightly higher figure, but never lower since R has an agreement with A. However, an unauthorized seller may choose to display a lower amount of, say, $1750, perhaps because they wish to attract customers.

Customers who visit S’s site will assume that $1750 is the correct price, i.e., the manufacturer’s suggested retail price. Supposing they compare how other retailers have priced the same item. In that case, they are likely to encounter R’s price, which happens to be the correct MAP. However, given that the right price is unknown to them, they will stick with the lower price and deduce that R’s price (the actual MAP) – which could also be the MSRP – is inflated.

In such a scenario, supplier A’s brand, which the company could have been marketing as a luxury brand, would be eroded or destroyed. And that’s not all. When consumers notice such price discrepancies, they often blame the supplier and not the retailer. In this regard, the fluctuations also destroy the brand’s image and could ultimately result in losses due to decreased sales. These issues demonstrate why retail suppliers need MAP monitoring.

What is MAP monitoring?

MAP monitoring refers to the process of checking whether online platforms have complied with a supplier’s or manufacturer’s MAP policy. It is done to identify violations and any fluctuations in the prices set. MAP monitoring is a form of web scraping, which means that it can take two routes – manual and automated.

Why automated MAP monitoring?

Manual MAP monitoring is time consuming, unreliable, and ineffective. This is because the possibility of missing some unauthorized retailers is high since the internet has over 150 online marketplaces, with experts noting that there’s more room for expansion. It goes without saying that more will be developed in the future.

When conducting manual MAP monitoring, one needs to keep in mind that existing marketplaces continually update their stock. Needless to say, monitoring the prices across the sites should be a daily undertaking. Secondly, one needs to always be on the lookout for new entrants in the e-commerce industry. These two factors make manual MAP monitoring unfeasible and unsustainable. It would require constant deployment of human resources to meet the objectives. The work would also be monotonous and could prove tedious for those who have to go through one website after another.

These drawbacks make automated MAP monitoring the better option. It is fast, stable, and reliable. Choosing this route guarantees accurate data on marketplaces that have breached the MAP policy as well as the compliant ones. Furthermore, the automated tools can go through multiple websites within a short while. Simply put, automated MAP monitoring is efficient.

What’s more, the automated web scraping tools organize the data in a structured format, thus easing the process of identifying fluctuations and misdeeds. If you’re interested in automated MAP monitoring, you can find more information in this blog post.

Benefits of MAP monitoring

While only suppliers and manufacturers carry out MAP monitoring, it benefits everyone across the board, i.e., retailers, consumers, and the suppliers/manufacturers themselves. Nonetheless, this article will focus on the benefits MAP monitoring has to suppliers. They stand to benefit in the following ways:

  • It safeguards their brand image and the company’s reputation
  • Through MAP monitoring, suppliers identify unauthorized retailers and blacklist/eliminate them.
  • Getting rid of unauthorized retailers also eliminates the channels through which counterfeit products reach consumers.
  • It increases sales and revenue since consumers purchase more of the supplier’s products, again because counterfeit products no longer hit the market.
  • MAP monitoring ensures standardization of prices among the sellers, thereby ensuring fair competition.

So, why do retail suppliers need MAP monitoring? Well, because many benefits abound, especially when and if they use automated MAP monitoring tools. MAP monitoring benefits not only the suppliers but also the retailers and consumers. It fosters brand loyalty and trust, which, according to several studies, ensures profitability – loyal customers will purchase the product repeatedly and will also refer their friends and family.

MAP monitoring has both direct and indirect benefits. Nonetheless, the bottom line is that the exercise ensures that the supplier remains in business for a long time and also guarantees sales and profitability.

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