Pricing is one of the most important merchandising decisions. A well-defined and backed up pricing strategy has the potential to increase revenue, improve margins and enhance competitiveness. Retailers often use in-store testing, sales history for similar products and traditional competitive analysis to determine prices. However, this approach often overlooks several essential determining factors.
Using an intelligent merchandising pricing solution will help retailers get better control of their price management processes, increase profitability and reduce inventory levels. By analyzing competitor pricing and market data, an effective retail pricing solution will help companies set the right price from the start. This will not only improve the new product success rate and forecast accuracy but also enable pricing strategies that maximize profit margins.
Beyond Displays: Unleashing the Power of Data-Driven Intelligent Merchandising
Retail pricing solutions are designed to support the entire process of establishing and supporting pricing strategy – from initial pricing through promotions and markdown optimization at end-of-life. They can be configured to fit a retailer’s pricing zones, store types and currencies, as well as account for product relationships to avoid any cannibalization issues.
Another feature of a robust retail pricing solution is its ability to adapt to seasonality, ensuring prices match demand. For example, an AI based retail pricing platform can reveal that white T-shirts experience a high demand during the summer, so the system can automatically lower them by 15% compared to the winter price. By doing so, the system will not only meet customers’ expectations but also ensure that inventories are in line with demand.