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Retail Pricing

What happens when you decrease the price of a retail item? Of course the immediate demand of this item will increase. Is that the only impact?

  • The demand for later periods will decrease as some of your customers will buy earlier than they planned
  • The demand for other substitutable products that you offer will decrease
  • The demand for complementary products will increase

Do you think a price reduction you recently made is the only determinant of higher sales that you enjoy now? All other factors that would impact the sales volume should be negated to identify the real impact of price on your sales. Pricing analysis should consider:

  • Time of the year, as most of the retail items have seasonal demand
  • Inflation and consumer purchasing power
  • Different macroeconomic conditions around different retail areas
  • Different household sizes which influences basket size for perishable items
  • Varying geographical presence density at different locations
  • Your competitors’ presence and prices
  • The life-cycle of the product: penetration, growth or phasing-out
  • Other specific conditions that may impact your sales depending on the type of the products you are selling e.g. number of new weddings at different times of the year is a key factor if you are selling durable household goods

Our Solution

  • In-depth analysis of significant factors that impact the sales volume
  • Determining price elasticity at more granular levels to differentiate price impact at different geographies
  • Price scenarios considering cross product impacts
  • Optimized prices with careful blending of mathematical modeling and marketing team’s experience

Please contact us for a tailored solution for your business