There are many ways for a retailer to achieve success. However, all of them are connected one way or another to price optimization. In fact, it’s the most important factor in retail success.
But what is price optimization?
Price optimization is the application of mathematical analysis in order to figure out how consumers will react to various price points in various channels. Additionally, it’s useful for analyzing which prices would help companies make the most profit.
It is beneficial to retailers to utilize price optimization because it ensures that they won’t find themselves in a position where they are overstocked and thus not making the most profit that they can due to the fact that they’ll have to put markdown on top of markdown in order to get rid of items.
The thing is, retailers will not win just by looking at prices. Instead, by taking into account the results of price analysis and utilizing pricing strategies, they will be able to beat out all of the competition.
So, price optimization sounds like it would be very beneficial, but can it be done easily?
Although math can be scary, it doesn’t have to be, if you use a pricing system such as Competera. With it, retailers are able to ensure that they receive the correct prices on items. Human-made errors are a thing of the past with a pricing software. Aside from that, misusing price optimization can significantly impact you in a negative way.
The thing is, the prices that a company offers say a lot about the company itself, so why not do it the right way? Apart from the fact that you’ll look better in the eyes of your customers, but you’ll also make yourself very competitive against the rest of the competition. On top of that, it’ll help stimulate your sales.
Another factor that must be taken into consideration is that consumers today know that it’s best to be patient and wait because they understand that with time, a retailer will end up offering promotions, thus allowing them to save money and get a better deal. Therefore, since discounting is a huge part of today’s shopping experience, retailers need to be smarter about pricing by figuring out what the impact is.
With the help of a pricing software such as Competera, you’ll be able to get the answers to questions regarding price elasticity, competition, as well as optimization. This is answered by analyzing customer behavior and other influential factors with the help a combination of the theoretical model, market data, and econometric modeling. Then, in the dashboard of the software, users can get a clean and well-organized visual based on the different groups of items. Users are also given price adjustment recommendations. In order to make decisions for the long term, the software is also capable of simulating future sales based off of past situations.
Apart from everything that the dashboard offers, Competera also delivers other concepts. For one, they offer analytical reports that outline the pricing model, demand factors, as well as SKU dependencies and recommendations, to name a few. It also offers the capability of integrating with either your ERP or export.
Additionally, don’t stop at just one category! WIth their category manager, you can manage many categories with ease. It’s all built based off of predefined KPIs, therefore you’ll be saving time while reaching your goals, which is the ultimate road to retailer success!