Online Vs Offline Differential Pricing

1. Team - Incognito,
MDI Gurgaon
Short-term
1 INFORM
Customer Awareness
& Education on the issue
2 EDUCATE
Empowering vendors with data
for informed Decision-Making
3 ENGAGE
Vendor Loyalty &
engagement program
Minimum Price Guarantee
Long-term
PROBLEM STATEMENT OUR APPROACH
Differential Pricing: Online Pricing | Offline Pricing
Offline Price
Differentiation:
Differential Pricing Online on the Swiggy’s platform as
compared to the offline partner’s pricing
Insights about the problem based on Primary Research
Why do restaurant partners indulge in differential pricing?
1. Restaurant partner realizes potential in the online marketplace but
does not want to let go of his profit share
2. Commissions ranging 18-20% charged by Swiggy, hence lower margins
for the partner
3. The trade promotions offered further dent the margins of the partners
4. Maintain a foothold in offline market
Challenges and Problems for Swiggy
1. Perceived as Swiggy’s activity by customers
2. Negative impact on the Brand Equity, customer loyalty decreases
3. Reduced repeat purchase due to lower offline pricing
4. The Self Serve model crucial for reduced Response Time allows partners to
change prices on their own, hence difficult to track
5. Setting up a separate team to monitor will lead to High Overhead costs
To inform customers about our commitment & dedication
towards ensuring price parity, educating partners about the
drawbacks of differential pricing and price sensitivity, &
ensuring Minimum Price by engaging partners & incentivizing
and assisting them in the long run

2. 1 2
Short-term Strategies
INFORM – Customer Awareness / Education EDUCATE – Vendors / Restaurant partners
Why:
Not aware of
implications/
outcomes
Myopic view of
short term profits
Solution:
Empowering vendors with information
for better and informed Decision-Making
Vendor changes
prices on Swiggy
Self-Serve
application
Vendor gets notification stating:
1. Potential loss of revenue/day
2. As customers are Restaurant loyal,
therefore potential loss of CLV
Implications: Fear based motivation
for price parity
Increased loyalty
for partners
Restaurant partner takes action based
on insights from real time data
Why:
Negative brand image of Swiggy
Consumers as they perceive
Swiggy as the culprit behind
charging higher prices
Solution: Swiggy’s Price Promise Program
How:
Utilizing Swiggylytics platform for real time
trend analysis based on other restaurants in
the vicinity/ similar type of restaurants
How:
Customer notices
price disparity
Clicks on “Help” tab in Swiggy app
Fills online web based form
OR
Attached picture of
restaurant’s menu
Customer gets
difference + Rs 50
credits for next order
We follow up with restaurant to make sure future orders have
consistent pricing both online and in the restaurant
Implications: Reduced vigilance
bandwidth hence costs
Customer
awareness

3. ENGAGE – Restaurant / Vendor Loyalty Program3
Long-term Strategies
MPG Tag on the listing on app along with
existing Hygiene tag. Further it can be scaled
to include additional schemes as well
Issue Warning and Deny
Change in Menu
Why:
Solution:
How:
Building Mutual Trust as there are no Long Term
Partnership/Loyalty Programs for Vendors in place
Restaurant Changes Prices & Attach
Offline menu’s image as a Proof
We use OCR to Scan,
Extract & Match records
with data in the database
for changes
Upload menu to
Swiggy application
What’s in it for Vendors
Increased
Customer Trust
Increased Orders &
Repeat Rate
Preferred Listing &
Rankings
Reduced Commissions
rate by 0.5-1%
What’s in it for SWI GGY
Edge Over
Competition
Enhanced
Brand Equity
Increased Profits due to
increased revenue/vendor
Restaurant changes prices on
Swiggy Self-Serve application
Further in long term SWIGGY can provide small & mid sized restaurants
with POS application for online & offline orders for increased transparency
and enhanced data collection leading to higher switching costs for vendors
Launch in zones → highest offline disparity in 2-3 cities
Analyze the results and then decide to scale up further