Just imagine the sh**show of a life if we applied rate parity to supermarkets
Oh come on, you know its true! And by now you should know that i have a series supermarket fetish :-) love it, and proud that i am one of those that loves to go and just walks the aisles lol hands down! and in Germany the feed my love as we get the paper brochures Sunday morning....I tell you...Sunday mornings....living the high life.
For today: For those who don't know what rate parity is: Rate parity is practised in the hotel industry and essentially means that the same rate is available across all online channel and that one channel is not cheaper and undercutting the other. I could go more into detail but you get the idea.
I know I know....some call it highly illegal as it is price fixing. Others go out of their way to discount their own channels so the save on 5% on commission on people that would have anyhow booked. (Between you and me I guarantee that previous sentence alone will put some knickers in a twist).
The other thing is: when a customer finds a cheaper rate that undercuts, then we say rate leakage as a rate not designed for public....leaked to the public...of course rate parity issue. So both things - parity and leakage - are getting the defenders of it up in arms screaming: Book direct, OTA`s are the enemy. Both ballocks if you ask me!
Got it?
Rate leakage & parity, both knickers twister!
One more thing: No one complains if a higher rate leaks and no one can tell you how many bookings did they get because they had different prices out there.
Last thing: Hotels use OTA's (Booking.com Expedia Group) to distribute their hotel rooms. For that they pay a commission.
Ok so we are totally clear now and in our example in supermarkets we do
- Vendors of products = Hotels
- Supermarkets = OTA`s
As i said in the beginning. What i love in Germany is the brochures on Sunday morning tell me which supermarket has which offer. Its kind of like booking a trip and browsing website...just for food.
We typically hit 3 supermarkets on a weekly basis: REWE Group ALDI SÜD and Lidl in Germany - I prefer Lidl, Sab likes Aldi, Haydo Rafa love Rewe (and I have found new admiration for Rewe since their stance on worldcup).
As most families we buy same stuff every week. I am sure if you look what you buy you have the same. Plus minus a bit of impulse buys because ... well....its just there. Pro tip: Never go shopping hungry!!!
Now, based on the above different brochures we change our sequence of purchase, pre buy some weeks for other weeks and buy products where they are on special. We checked last month and you have around 20-25% on your grocery bill if you treat it that way.
Imagine now that is all gone. All three supermarkets same price. The product maker tells the supermarket the price to sell...savings gone, differentiation gone, revenue opportunities gone! No point going shopping might as well Amazon it all.
Real life, last week:
Hayden and Rafa. Both had 2 EUR each. The both want chocolate. They could go for the non brand, but they decided for the branded version - suckers for quality (Milka).
At Rewe I said: Go, get it! and both in unison: Papa, didn't you see! Here it is 1.79. we can only get 1 each. At Aldi they are down to 99 cents. we wait until then!
So if you ask me: Here's to a world of no parity and making your money work for you and having double the fun! Treat yourself this week.
Love
Fabs
