When the summer heat starts disappearing and we all start bundling up in layers upon layers of clothes to protect us against the crisp, cool air of Autumn and the freezing temperatures of winter, all of those in the retail industry know: it’s time.
Not only are we bracing ourselves for winter; but everyone involved in retail is bracing themselves for this extremely hectic time of the year. While everyone has their hands full getting ready for holiday promotions and sales, a brand’s MAP policy often falls by the wayside.
Today’s post covers how some brands adjust their MAP policy terms to accommodate their sellers during the busy months of September to December, red flags to watch for that highly indicate there’s a MAP violator in the wings, and an action plan to get your policy geared up for the holidays!
IT’S THAT TIME OF YEAR FOR SOME SERIOUS SHOPPING
Are... you... ready... to... rumbleeeeee?!
In other words, are you prepared for the upcoming holiday season and big retail days that are just around the corner? With the end of October in sight, November and December will go by in a flash. Many brands and their sellers start getting ready as early as the summer, and hustle to get things all setup, tested, and completed by Halloween.
As soon as November hits, it becomes the ‘most wonderful time of the year’ (cue Christmas music) for the retail industry, and increasingly for online retailers. The first big weekend that everyone anticipates falls on the last weekend of November: Thanksgiving (this year, November 24th), Black Friday (November 25th), and Cyber Monday (November 28th). Last year, over $4.45 billion were spent online in the first two days of the holiday weekend. This was an increase from last year, as spending in brick and mortar stores decreased by 10%.
Once November ends, things get frantic during the month of December when consumers are scrambling to buy Christmas and holiday gifts and pick up deals on Cyber Monday.
With these months being the go-go-go time for the retail industry, it’s easy to be inundated with all the preparations and neglect your MAP policy.
MAP POLICIES CAN CHANGE A LITTLE TOO
Besides being extra vigilant about MAP violations during this time, many brands create and/or adjust MAP policy terms for the days during this period.
Other brands and manufacturers change their MAP policy?! Why?! Brands understand that during the weekend of Black Friday and Cyber Monday, they need to market their brand more aggressively during this busy selling time, while helping their retailers sell more product at a discount since consumers expect special deals. Adjusted MAP pricing terms allow brands and their sellers to stay competitive and bring people through door. The alternative is keeping prices as they are, which can make it a lot harder for retailers to promote your products as compared with your competition.
Some of the most common ways that brands flex their MAP policy terms for these big retail days are as follows:
1. Increasing MAP price % for a specified number of days: MAP price differs from brand to brand. One company’s minimum advertised price might sit at their MSRP with others at a certain percentage below. During these busy times, there are brands that increase the range for their MAP price. For instance, say the MAP price is to be no lower than 10% below MSRP. However, on days like Black Friday or Cyber Monday, you increase it to 30% below MSRP. Therefore, sellers that advertise your products within 30% of your MSRP on Black Friday or Cyber Monday will not be considered MAP violations.
2. Completely removing MAP policy for a specified number of days: Then there are some brands who go no-holds-barred on their retailers -- so anything goes. It’s as if your MAP policy doesn’t exist. Again, using the example that your usual MAP price is no lower than 10% below MSRP; on these special retail days, your sellers are free to advertise products at any price they want in this scenario.
Although it might be cutting it close to update your MAP policy for November and December, there are still plenty of other upcoming holidays and months that you can keep in mind to adjust your terms. Instead, it might be best to focus your attention on keeping an eye out for indications of MAP violations.
HOW TO SPOT MAP VIOLATIONS
With or without flexible MAP policy terms, there’s so much buzz and commotion going on that you need to be on your A-game when it comes to MAP compliance. It’s important that you’re on your toes and know the indications to look for that are often MAP violations and/or loopholes in a MAP policy, but won’t necessarily be detected. Let’s go through our cheat sheet of red flags:
1. Buy One Get One Free (BOGO)
These are pretty straight-forward MAP violations staring brands straight in the face. Unless there’s a special promotion issued by the brand, BOGO offers are typically signs that a product is being priced far below MAP since the value of the second ‘free’ item effectively discounts the one being paid for. Since BOGOs are usually a promotional tool, prices are subject to being advertised, therefore violating MAP.
2. Request to “Call for Price” or “Click for Price”
Have you ever shopped a marketplace and found a product that you’re interested in, only to be left in the dark about price until you clicked or called for more info? It’s often viewed as nuance that allows sellers to circumvent a blatant MAP violation, but nowadays this is actually an outright MAP violation according to most policies. For policies that do not specifically rule out this practice, it’s not only a pain in the butt for the online shopper, but can result in feelings of frustration directed towards your brand through an uncomfortable customer experience.
The motivation for sellers is obviously to price the product below MAP. If this extra step is a loophole in the policy, it should no doubt be addressed by the brand. If your MAP policy does not disallow this practice, find sellers engaging in this activity, and keep an eye on them. Evidence of the actual sale price is bound to appear out in the open, which effectively advertises the product at particular price by a particular seller. A seller will be hard pressed to prove that they didn’t have an associate make the post themselves thereby ‘leaking’ a privately quoted price. This chatter will pop up on reddit, coupon sites, community forums, social channels and anywhere else people look for deals on your products.
3. “Add to Cart to See Price”
This is another seller tactic that makes customers go the extra mile before seeing what the price is. Often times, MAP policies only apply to the listed, advertised price - ultimately, anything before adding an item to your cart or checking out. Again, most successful brands are ruling out this as an option for sellers that want remain in accordance with their MAP policy and retain the authority to act as an authorized retailer of their products. It’s a loophole that needs to be addressed for a MAP policy to be effective.
Keeping track of all this can be quite a handful, and you need to be well armed and prepared to properly identify MAP violators.
PREPARE YOUR MAP POLICY FOR THE HOLIDAY SEASON
How should you prepare for the upcoming months when it comes to your MAP policy? Where do you even start? We share our list of top tips for making sure your policy doesn’t get lost in the flurry of holiday prep:
Remind your sellers about your MAP policy terms during this time
In the next two weeks or so, send a quick note to all your sellers saying “hey, in case you forgot during this busy time, here are our MAP policy terms.” It might simply be a note to keep your dealer agreement top-of-mind (if you have no flexible terms) and/or remind sellers you have flexible terms, or an announcement introducing a policy adjustment (although we don’t recommend doing that now- maybe wait until the new year).
Include your policy and highlight the consequences of violating. Always take the nice, friendly approach in your communication to your sellers. Trying drive compliance with fear doesn’t usually work. Check out what retailer, Autoplicity.com, has to say about creating allies, not enemies while communicating about your MAP policy.
Realign and coordinate with your team
Just as important as your sellers, make sure your team and stakeholders are all up to date with your MAP policy and any flexible terms that sellers may be subject to. You don’t want to get yourself into a scenario where a seller is accidentally identified as a violator on Black Friday, even though your brand’s policy allows them to advertise at their price.
A lack of communication and misalignment within your internal team can result in damaging seller relationships. Similarly, send out an email to your team and stakeholders so everyone’s on the same page.
Review your MAP policy process
Take the little bit of time that you do have and go through your MAP monitoring process. Are your tools properly setup to effectively enforce your MAP policy in this extremely busy time? Will you increase the frequency of searching across marketplaces? How will you keep track of all the existing violations and the ones that come up during the holidays? Try refining your management process with our step-by-step guide to MAP monitoring and enforcement in 30 days.
These are just a few questions that come to mind with MAP enforcement for November and December. It comes down to making sure that your process and tools keep you organized, flexible, and up-to-date.
Setup MAP monitoring software to manage everything, including potential adjustments
If the thought of manually monitoring everything scares the crap out of you as we approach Thanksgiving weekend and Christmas, consider setting up MAP monitoring software. It’ll take care of the tedious, mundane steps within the MAP compliance process that are prone to risks and errors, while giving you the peace of mind and freedom to focus on your goals for the holiday season. You don’t want your resources bogged down with monitoring and enforcing.
Follow these four tips to make sure your MAP policy doesn’t get lost in the festivities of the retail season!
While you protect yourself with a big warm jacket this winter, remember to shelter your brand with your MAP policy during the holiday season.
With Black Friday, Cyber Monday, Christmas, and Boxing days around the corner, many brands adjust their MAP policies to help their sellers stay competitive. During this busy time, it’s especially important to know what to look for when it comes to MAP violations and take the right measures to be prepared. Trade Vitality can help.