Benefits of retail pricing intelligence
By PaxcomGain Visibility Into Your Costs, Profits and Margins - The first and most obvious benefit of retail pricing intelligence is that it helps you to see your costs clearly. You can see how much it costs you to put the product in the shop, to get the packaging and to advertise it on social media. You can also see the margins you make on each product. You may have a few exclusives, but for the most part, you can plan your inventory and marketing to maximize margins. As a retailer, you may not know how much to charge for your products until you start selling them. You may have a clear idea of the value you place on the product and the customer experience, but you might be missing the costs.
Defines Your Market - When you set your prices, you have to have an understanding of your market. This includes understanding your competition and where you stand out from the crowd. Setting prices based on your competitor’s margins and margin analysis gives you this information.
Determines Margin - With an understanding of your market and the margin for your products, you can now determine your margin.
Helps You Plan Inventory - The last thing you want to do is set your prices, but not have a strategy for how to manage your inventory. You will have issues with inventory and managing it will be difficult. With an understanding of your margins, you can start planning your inventory.
Exposes “Duds” - By figuring out what your competitors are charging, you can then figure out what is not selling. This helps you identify your “duds” and determine if they should be cut from your line-up.
Build Price Sensitivity Into the Consumer Mindset - Price sensitivity is one of the most important aspects of consumer behavior. It’s so important that a lot of retailers even have an internal team who focuses on building price sensitivity into the consumer mindset. There are a number of ways that retailers can build price sensitivity into the consumer mindset, but they ultimately come down to ‘show, don’t tell’. Retailers can use price comparisons, real pricing strategies, in-store educational content, social media contests and more to help consumers see that price sensitivity is about more than just price.
Engage Consumers Before They’re Ready to Buy - The best way to build price sensitivity in your potential customers is to engage them before they’re ready to buy. Before a consumer is ready to buy, they see everything as a potential purchase, and they have a fairly open mind. Engaging consumers before they’re ready to buy can help you make gains in brand awareness and trust. When you engage consumers early on, you can make a mark in their minds before they’ve made many decisions. If you want to make a big impression on your target consumers before they’re ready to buy, you can try a few things.
