Indeed, the subsequent launch of WorldWide Retail Exchange, with sales of $300Bn, and 100,000 suppliers, involving Albertson’s, Auchan, Casino, CVS Kingfisher, Kmart, M&S, Ahold, Safeway Inc, Target, Walgreen and Tesco, leaves only one major player unaffiliated……

Elaborate, even convincing, arguments as to why a brand has different prices in different countries will be subject to download fatigue and could be ignored as buyers move on to more ‘instant’ offers....’quick, just gimme the price’.  We all know that price is only one part of the total offer proposition.  We all know that there are valid reasons why the product cannot be sold at the same price everywhere.  However, the fact is that the product will not be bought everywhere.  What cannot be prevented is customers buying at the lowest convenient price and re-shipping where necessary.  This new availability will force suppliers to fundamentally re-think the total needs of the retailer/consumer and then use value-engineering to strip out revealed excess.  ECR will supply some of the questions, but category management can supply many of the answers.

These globally local marketplaces and idea exchanges will not simply be restricted to global products and brands, niche players will also find it a channel to selective customers. However, these moves have, in a stroke, swept away the remaining barriers and excuses related to price harmonisation.  This is not to say that all prices will become the same, but it does mean that the differences in price for a global brand will have to be set within a tolerance ‘corridor’ of 3-300%, depending upon ease of transfer of the brand by third party entrepreneurs.  The real problem will be in establishing the size of the tolerable gap between lower and upper price levels, by category, across the world.  The new global exchange will simply accelerate the process.

The exchanges, scheduled to become operational by mid 2000, will allow suppliers and buyers to conduct transactions online and aims at dramatically lowering both inventory and administrative costs.  However, in order to be compulsive for suppliers, the exchanges will need to be able to leverage their large turnover, hence the anecdotal evidence already available of advanced discussions with leading global players in an effort to create industry-wide cooperation.  However, it could be said that with everyone in the loop, where lies the competitive advantage?

In practice, retailers’ basic differences within their own organisations across the world, let alone differences between competing retailers, simply means that the various offers will represent different levels of attractiveness to individual customers.  This will represent a global product pool into which all are able to seek a pricing reference point.  Unless suppliers are prepared to, and are capable of presenting their ‘stripped-down’ and best offer at the global table, factoring in all aspects of need satisfaction, then opportunity will simply migrate to competing suppliers.  Equally, buyers need to take a mature view of that price on the table, factoring in service level, positioning and branding, in order to make a wise buying choice.

Whilst the global marketplace may not offer up all of its potential in the short term, suppliers would be unwise to delay becoming involved.  Meanwhile, global brand owners now have 30 days to conduct a ‘what if’ on having to quote a single unadorned price, a price available to all customers, and competitors, everywhere.