Particularly in digital marketplaces and digital services.
These regulatory changes, amending four existing directives, are slated to take effect on October 1, 2023.
The 30-day benchmark
The new rules state that when you want to put a discount label on a product, you must first compare its current price to the lowest it has been in the past 30 days. Regardless of any price changes within that period, you can still offer a discount, but it should be based on the lowest price within the last 30 days.
This requirement is aimed at ensuring that the compared price serves as a genuinely reliable reference point for consumers.
Understanding personalized pricing
In the era of automated decision-making, businesses have a responsibility: If a price is personalized and determined through an automated process, businesses are obligated to inform consumers about this before any agreement is made.
This empowers consumers with the knowledge they need to make informed decisions about personalized pricing. It's all about giving consumers control and transparency in their purchasing journey.
Including loyalty clubs and discounts
In the new regulations, promotional prices offered to customer clubs will be included in the base price calculation. As a result, sales to customer clubs will be considered when evaluating the historical base price - especially when determining the lowest price a product was sold for before a campaign.
This change comes from the recognition that many people take advantage of these promotions and reduced prices, because they're so easy to access.
That's why loyalty clubs and discount codes are now part of the rules, ensuring they're considered when we look at prices during a campaign.
Why is it so important to comply with the new regulations?
Businesses should prioritize adhering to Norway's new regulations for a range of important reasons:
1. Enhanced consumer trust: Complying with these regulations is crucial for building and maintaining consumer trust.
Why? Because it showcases a commitment to transparency - that all customers have access to clear and accurate pricing information.
This transparency empowers consumers to make informed decisions, which in return instills more confidence in the brand.
2. Legal protection: Not following these rules can unfortunately result in fines and legal issues. These fines can be as much as 4% of your annual turnover or NOK 25 million (if it’s a higher amount). Therefore, mastering these rules is crucial when conducting sales campaigns after October 1st this year.
Complying is both a legal requirement and a way to avoid problems, showing that a business values ethics and can improve its reputation.
3. Fair competition: By following these regulations, businesses create a fair environment in the marketplace. Which as a result stops non-compliant competitors from gaining unfair advantages and encourages healthy competition.
Compliance supports fair competition and equal opportunities for everyone in the market.
4. European alignment: These regulations match the EU 2019/2161 modernization directive, showing that Norway wants to have the same standards as Europe.
Which helps make pricing practices consistent and helps businesses operate across EU borders much easier. In other words, boosting economic integration and growth, simplifying expansion for businesses into European markets.
Summing up: Compliance with the new regulations ensures consumer trust, legal security, streamlined operations, fair competition, and aligns Norway with European standards.
Which helps lay a strong foundation for long-term success.
How these changes impact e-commerce companies
Before we take a look at potential solutions, let's dive into the reasons behind these changes plus the impact they will have on e-commerce companies today – especially those navigating these changes without a streamlined solution.
Why are these changes being made?
The reason for these adjustments can be traced back to the Modernization Directive, a reaction to evolving consumer rights and digital commerce.
This initiative took shape in April 2018 when the EU introduced the "A New Deal for Consumers."
Its goal was to enhance consumer protection, streamline regulations, and fortify enforcement mechanisms.
The overall impact on e-commerce
- Increased oversight: With the Modernization Directive, there's a stronger focus on enforcing consumer protection. E-commerce companies have to be attentive in order to avoid fines.
- Complexity and compliance: Without automation, calculating discounts and following 30-day pricing rules can be tricky and lead to mistakes (due to human error)
- Competition: Companies not adapting swiftly may struggle to keep up with competitors who adjust pricing for compliance and competitiveness.
- Customer trust: Non-compliance can damage consumer trust, as shoppers want clear pricing.
- Operational efficiency: E-commerce companies without automated tools can run into inefficiencies, affecting their pricing processes.
E-commerce companies might encounter challenges in keeping up with rules, potentially affecting their ability to compete, gain customer trust, and run their pricing operations smoothly.
Enter Reprice: Your tool for compliant pricing
Navigating the new regulations doesn’t have to be challenging.
Here’s how Reprice helps you easily navigate the new Norwegian regulations on pricing and sales marketing:
Automated discount calculation
Here’s the thing: Reprice already understands how hard it can be for businesses to follow pricing rules and stay competitive.
That’s why it offers an automated discount system.
This system simplifies pricing tasks that are usually complicated and time-consuming when done manually — reducing errors and inconsistencies.
1. Historical data analysis
The first option involves the analysis of historical data. The tool assesses the lowest prices products have had in the last 30 days, as this ensures precise discount calculations.
For instance, if a product was initially priced at 2990 NOK but saw a recent low of 2490 NOK during a weekend campaign, Reprice applies a 25% discount based on that lower price, adhering to the 30-day rule.
2. Product exception
The second method involves smart data filtering. Reprice automatically pinpoints products that could breach pricing rules and excludes them from discount campaigns.
For example, if a customer wants to run a brand campaign, Reprice identifies products from that brand with prices lower than the current list price in the past 30 days and excludes them from the discount initiative, ensuring compliance.
3. List price adjustment
In cases of pricing violations, Reprice performs list price adjustments discreetly, avoiding the label of "discounted."
For instance, in a campaign featuring a 25% discount on a brand, Reprice detects products with recent lower prices and finely tunes their list prices, ensuring compliance without openly marking them as discounted.
In the fourth approach, Reprice adjusts the discount percentage based on the lowest observed price in the past 30 days.
For instance, if a product initially cost 2990 NOK but recently hit a low of 2790 NOK, Reprice automatically applies a precise 19.62% discount, instead of 25%, keeping things in line with the 30-day rule.
Important: In this fourth option, it's crucial to convey that the campaign offers discounts "up to 25%" on selected products in marketing materials.I t's essential to market the campaign correctly for all options, emphasizing that discounts "up to 25%" are offered on selected products in marketing materials.
Why? Because the campaign message plays a vital role in complying with the regulations.
The new regulations present both challenges and opportunities for businesses in Norway.
Embracing these changes fosters trust through transparent, consumer-friendly pricing, while ensuring compliance.
Reprice plays a pivotal role in this transformation: Through automated discount calculations, manual pricing adjustments, and rule-based automation.
Plus, the tool empowers businesses to stay competitive with real-time competitor pricing monitoring.
These features collectively streamline pricing strategies, ensuring adherence to regulations while maintaining a competitive edge in the market.
Curious to learn more about the regulations?
Contact us today to dive deeper into the details. We're here to help.
Get a free compliance report for your top products
Beyond these regulatory insights, we also provide a hands-on solution to assess your compliance.
Are you wondering how your products measure up against the pricing regulations?
Our free report offers a dive into your alignment with the rules, ensuring transparency and creating well-informed decision-making.
Having this analysis helps you to adhere to rules and enhance your pricing strategy - ultimately leading to improved outcomes (keeping the new regulations in mind).
Contact us today by sending an email to email@example.com and get your free report!
Robin Frugaard Jørgensen
Chief Commercial Officer at Reprice
Robin Frugaard Jørgensen is Chief Commercial Officer at Reprice. Prior to joining Reprice in January 2023, Robin spent several years working with pricing strategies in B2B & the consumer electronics industry. Connect with Robin on LinkedIn here or book a demo to see how Reprice can solve your e-commerce pricing challenges.
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