The Retail and Commerce module in Dynamics 365 offers extended functionality around pricing and discounts to help improve sales dollars by attempting to increase cart sizes against existing margins for products. Before we dive into the Retail and Commerce pricing functions, however, we need to understand what "standard" pricing functionality there is without Commerce.
Standard Pricing
The standard "Sales and Marketing" pricing structure has a few different parts to it. For the sake of this blog I will assume a basic working knowledge of standard sales pricing (base price, trade agreements) and skip to the advanced functions available with Retail and Commerce. Summarizing the functionality simply, standard pricing allows for the following use cases:
1. Base prices before special pricing
2. Special pricing for customers, customer groups
3. Line discounts (amount and percent)
4. Multiline discounts (amount and percent)
5. Total discounts
Advanced Pricing Structures
Retail and Commerce expands on the standard Sales and Marketing trade agreement logic to include unique pricing scenarios such as the following:
Quantity break discounts
Dollar threshold discounts
Mix and match/bundle pricing including BOGO functions
Shipping discounts based on dollar values of orders
Tender-based discounts to receive a discount on a transaction based on how it is paid for
Before we begin we must understand how these discounts are applied and some general functions that relate to all Retail and Commerce pricing structures.
Price Groups - The Application of Retail Prices
Retail and Commerce uses the concept of price groups to allow specific prices and discounts to apply to customers, groups or customers, specific locations, or specific instances of a sale. Price groups have a wide range of applications to suit specific needs. Price groups can be assigned to the following places in Dynamics 365:
On a customer (through affiliations)
On specific retail channels
On loyalty programs at the program level
On loyalty programs at the specific tier level
On catalogs and source codes
On individual sales orders at user's discretion
Based on where the price group has been assigned, a discount can become eligible only when a customer provides information to the sales taker (such as their loyalty card or a source code from a catalog), or they can apply any time the customer places an order.
Pricing Priorities - Specialty pricing hierarchy structures
A feature that exists on all retail pricing structures is the concept of a pricing priority. Every discount starts with a priority of 0, which means all prices are evaluated at the same level. However, if you create a pricing priority of anything else (it could be a number, or something like "Priority") these will get evaluated first before any other discounts. For instance, if you have a discount (standard discount offer) with a higher priority than a discount with no priority, it will be evaluated and applied (if it's supposed to be) before any discounts without a priority are looked at. This is helpful if you want to make sure specific prices are given to customers rather than having all discounts be applicable based on their price group/affiliation.
Concurrency mode
There are a few different concurrency modes that the Retail and Commerce pricing engine can use. In general, there are 4. The concurrency modes are as follows:
Exclusive - This discount applies before anything else, and no other discount will apply on top of it. If you've ever written a discount and the disclaimer is "Cannot be combined with any other offer," it is most likely an exclusive (or best price) discount.
Note that exclusive discounts, if there are more than one in the same priority, will behave like best price discounts which I will explain next
Best Price - There are usually multiple best price discounts that exist in your environment. The name speaks for itself. If there are multiple discounts that are all set as concurrency mode of Best Price, the better discount will apply to the order to give the customer the....best price
Compounded - The compounded discount is when you want multiple discounts to apply at the same time to a give item/category. Again, this is pretty self-explanatory. Discounts will compound on top of each other if multiple discounts both have this concurrency mode selected.
Always apply - This again is relatively self-explanatory, but has some caveats to it. When a discount has a concurrency mode of always apply, it will apply regardless of if a discount is Exclusive, Best Price, or Compounded. However, please note that these discounts will apply AFTER all other discounts are considered.
Financial Posting Differentiation
All discounts in Retail and Commerce have the ability to post to their own specific GL accounts. Generally speaking, when I've seen this use is when a company wants to understand the financial impact of a specific discount/marketing campaign and needs to understand the financials behind a discount's effectivity. There are some parameters that must be set to allow this to work, but once completed these can post to specific GL accounts instead of using the standard discount posting profile functionality.
Coupon-ability
All discounts in Retail and Commerce also have the unique ability to require coupon codes to be entered for them to be taken into effect. There are a lot of extra setups that goes into this, but from the discount itself you'd mark the discount as Coupon Code Required and this would allow you to set up these discounts with coupon codes that have a ton of variability in how they can be configured. At a high level, though, they would require (generally, again as a configuration) a coupon barcode to be entered for the system to even try to apply that discount.
Effectivity
Discounts in Retail and Commerce have 2 different ways you can make them effective:
Standard effectivity dates
Advanced effectivity periods
Below I'll go through each.
Standard Effectivity
Standard effectivity is the simple version of effectivity on a Retail discount. This gives you the ability to specify a start and end date for the discount. As soon as the start date hits, the discount becomes effective. As soon as the discount hits the expiration date, it is no longer considered in the system. This is very similar to how trade agreements work, so nothing new here.
Advanced Effectivity
Retail and Commerce has added special functionality to allow for uniquely retail-style discounts. An advanced effectivity period could be something like:
Happy hours (everyday between certain times of the day)
Only on certain days of the week
A combination of the two above
Effectivity on specific days of the week with different effectivity on other days of the week (Mondays this week, Tuesdays next week, etc.)
This, in my eyes, is a very powerful tool for certain retailers who would want to run things like flash sales that only run for a few hours on a specific day. Without advanced effectivity functionality the promotion would need to run for the full day.
Price Group combination compliance
All discounts in the retail pricing engine require the use of price groups, as we've discussed. We can have multiple price groups against a single discount. This would mean that if the two price groups are:
Veteren (affilliation)
Texas (location)
Anyone with a veteran affiliation would receive the discount, and anyone who went into the Texas store would get it.
However, there is a chekbox on every discount in the retail pricing engine called "Match all associated price groups." What this checkbox means is that a user needs to be associated to BOTH veteran as well as the Texas store to receive the discount. Someone not in the veteran price group would previously get this discount, but with this checkbox checked, they wouldn't get the discount anymore (since they only have 1 of the 2 associated price groups).
Summary
What I've discussed above is what all discounts share within the Retail and Commerce module. In upcoming blogs I'll cover the anatomy of the different types of discounts that the module offers, namely:
Simple discounts or discount offers
Quantity discounts
Mix and match discounts
Threshold discounts
Shipping threshold discounts
Channel tender discounts
These discounts are exclusively useable if you are using the Retail and Commerce module, and can expand the pricing complexity and elegance of a company's pricing structure, giving customers a better price while driving sales up through campaigns and promotions of these different discount combinations.
As always, if you have any questions, please feel free to reach out to me on my website or through my blog. I'm always happy to hear from you!
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