If you’ve read through the posts leading up to this one, you know that a Minimum Advertised Price (MAP) policy is essential for protecting a brand’s market positioning, profitability, and long-term growth. A well-designed MAP policy helps brands maintain consistent pricing across various sales channels, ensuring that their products are not devalued through excessive discounting. However, even the best MAP policies and enforcement strategies can fail without the right data. Accurate and timely data plays a critical role in enforcing MAP compliance, identifying violations, and taking corrective actions.
In this post, we’ll explore why data is the backbone of MAP compliance, how it impacts decision-making, and the challenges brands face when data is incomplete or inaccurate.
We all know that the e-commerce landscape is vast, with seemingly countless retailers and marketplaces, and an increasing number of third-party sellers popping up by the hundreds each day. Brands that we talk to at Pervasive Mind are admittedly struggling to not only understand the ever-changing market dynamics, but they want to be successful in spite of the complexities that arise daily. Better said, they don’t just want to tread water, they want to swim like Michael Phelps or Bobby Finke.
Putting it bluntly, manually monitoring this expansive sea of retailers to identify MAP violations isn’t just impractical, it’s borderline crazy. There are simply too many sites for a team of humans to monitor, let alone to complete the necessary data validation, which is critical to any MAP program’s success.
Automated MAP compliance tools rely on consistently extracted data to track advertised prices across retailers, marketplaces, and websites so that teams of people don’t have to. But – and let me be very clear about this – all data extractors are not created equal, and the data accuracy spectrum is wide, not to mention sometimes scary.
The Role of Monitoring & Scraping Frequency
Constant monitoring helps brands detect MAP violations quickly, allowing them to act before unauthorized pricing has a chance to hurt their brand. The faster a violation is identified, the sooner a brand can address the issue with the retailer, protecting its pricing integrity.
To be clear, this doesn’t mean that brands should expect real-time monitoring or “always-on” monitoring. That sort of constant presence on a retailer site is the best way to get blocked and lose your channel visibility for good.
Brands are best served by a solution provider that will balance scraping frequency with your team’s bandwidth and unique requirements, so as not to be detected by the retailer/marketplace.
Important Note: Remaining undetected is the first step in capturing accurate data.
Enforcing Compliance Consistently
Accurate data ensures that brands can enforce their MAP policies consistently across all retail partners. When data is incomplete or outdated, enforcement becomes selective, leading to potential friction with retail partners and damaging relationships. Inconsistent enforcement can also open a brand up to accusations of favoritism, making it harder to maintain strong partnerships.
With accurate data, brands can hold all retailers to the same standard, ensuring fairness and transparency.
Maintaining Brand Value and Customer Trust
Pricing discrepancies across different sales channels can confuse customers and erode brand trust. If a customer sees the same product advertised at vastly different prices on multiple websites, they may question the quality or authenticity of the product. Additionally, customers who purchase at a higher price may feel deceived if they later find the same product being advertised at a lower price by another retailer.
Accurate data helps brands maintain pricing consistency, which protects their brand equity and ensures that customers can trust the prices they see across different platforms.
The Challenges of Managing MAP Compliance Without Accurate Data
Manual Monitoring
Some brands still rely on manual monitoring to check advertised prices across sales channels. This approach is incredibly time-consuming, costly, and prone to human error. With the sheer volume of products and sellers in the e-commerce space, manual monitoring is neither scalable nor reliable.
Over the last several years, we’ve met brands that leverage large, multi-unit teams (legal, sales, marketing) to try and accomplish the task of manually monitoring their brands. One consumer electronics customer estimated they were spending more than 500 employee hours a week to cover less than 20% of their catalog. This sort of resource strain hurts morale, productivity, sales and profits, and is simply not sustainable.
Without the right data and automation tools, brands can easily miss violations and spend more time on low-value tasks than those that move the business forward.
Fragmented Data
E-commerce is, by nature, highly fragmented, with products being sold on multiple platforms, marketplaces, and retailer websites. Each platform has its own pricing dynamics, and many brands struggle to consolidate and normalize data from the various corners of the web.
Accurate, consolidated data from all platforms is essential for effective MAP compliance. Relying on inaccurate data can lead to missed opportunities for brands to correct pricing issues before they escalate. If a violation goes undetected for too long, it can result in significant damage to a brand’s reputation and financial performance. One example of this is the US holiday season, where we’ve seen as much as a 30% increase in MAP violations, as retailers aim to finish the year strong by capturing feverish shoppers hoping to get a bargain in a hurry.
The Financial Impact of Inaccurate Data
Revenue Loss Across the Board
When MAP violations are missed due to inaccurate data, it can impact the business in several ways. Most brands will see some form of revenue loss, whether it’s from missing out on sales directly from the brand’s site, missed Buy Box opportunities on Amazon, or even lower account values as retailers and distributors reduce purchase orders because the expected sales velocity doesn’t match reality. For the past 9 years, brands have told us that this sort of revenue loss can impact the business by as much as 5% across the board, and up to 30% for on-MAP products.
Higher Cost of Enforcement
Another financial impact brands feel when data is fragmented, inaccurate, or missing altogether is the need to allocate more resources on enforcement efforts. This comes in the way of personnel costs and includes the hours spent manually tracking violations, investigating complaints, and handling disputes with retailers. Brands that lack automated MAP monitoring tools may spend as much as 3-4 times more on enforcement compared to brands that leverage accurate data and automation.
How AI-Driven MAP Solutions Protect Brand Value
AI-driven MAP solutions like Pervasive Mind’s allow brands to feel confident that they are seeing the whole picture when it comes to protecting their pricing integrity. By leveraging accurate, comprehensive data, brands can detect violations early, enforce policies consistently, and maintain strong relationships with retail partners.
Challenges and Solutions in Implementing MAP Policies
Monitoring and Enforcement
One of the primary challenges in implementing MAP policies is the ongoing monitoring and enforcement required to ensure compliance. With the proliferation of online retail channels, keeping track of advertised prices can be daunting. As much as brands need the pricing data to successfully drive their business, retailers equally want to keep a competitive advantage against other retailers who may be scraping their prices. We’ll talk about this in our next post, but many retailers implement blocking technologies that purposely make price extraction difficult. Brands can address this challenge by investing in automated monitoring tools like Pervasive Mind’s MAP solution that couples artificial intelligence into a comprehensive scan of various first and third-party sites/marketplaces to identify price violations. There are many MAP providers out there and the most reputable will all offer similar features and functions, coupling clear evidence of violations with workflow, allowing brands to take prompt action. The best-in-class offerings will do so with upwards of 90% accuracy. At Pervasive Mind, we pride ourselves on delivering data every day with more than 99% accuracy.
Legal Considerations
While MAP policies are generally legal, they must be carefully structured to comply with antitrust laws. We talked about this in a previous post, but we strongly recommend that brands consult with legal experts to ensure their MAP policies do not inadvertently constitute price-fixing. Properly drafted MAP policies should focus on advertised prices rather than dictating the final sale price, maintaining a clear distinction to avoid legal pitfalls.
In Summary
MAP policies are an essential tool for protecting a brand’s value, ensuring fair competition, and safeguarding profit margins. By maintaining consistent pricing across all online retail channels, brands can enhance their market positioning, build stronger relationships with retailers, and gain the trust of consumers. While there are challenges in implementing and enforcing MAP policies, the benefits far outweigh the difficulties. Brands that commit to robust MAP compliance can expect to see long-term gains in both their brand equity and bottom line. Talk to our team at Pervasive Mind today to explore how our AI-driven MAP solution can help your team remove the complexity from your MAP monitoring and enforcement.
