Price Intelligence in retail is a fairly recent area of interest. In all our discussions with industry analysts, many of them are well versed in pricing for manufacturers, but retail price intelligence is something that seems to only have become essential relatively recently, as price transparency and greater consumer price sensitivity have increased.
True retail price intelligence is the ability to make better pricing decisions based on accurate, timely data to positively impact revenues, margins, and the number of units sold. But how do you actually use this intelligence to make these positive changes? Our recent white paper, 5 Price Intelligence Secrets Revealed, aims at uncovering some of these tactics.
Two of these tips are particularly interesting:
- Use price intelligence to win price negotiations with manufacturers: By comparing your prices to your competitors’ prices on a brand level, it becomes be easy to identify if you are consistently higher priced on a certain brand compared to the competition. This may be an indicator of one of two things: 1) You have higher overhead costs than your competitors or 2) the manufacturer is not giving you the best price possible. If you are only being out-priced on a few brands, chances are your overhead costs are not to blame, and you can use this information as leverage in your negotiations with the manufacturers.
- Using CPI to price new or similar-products: Pricing newly released products, or products exclusively sold by you, can be challenging. It requires you to do the same kind of analysis a consumer would do, which means not only comparing prices on the same model across a number of retailers, but also comparing the prices on similar or substitute products. Doing this kind of analysis manually for so many products is nearly impossible however, and this is where CPI comes in. By using a similar-matching solution, retailers are able to compare prices on products that share many, or all of, the same features. Consequently, they are able to optimize prices on their private label products, and determine what brand premiums newly released products can support.
These are the kinds of tips and insights that may not come to mind right away when thinking about price intelligence, but can represent significant sources of cost savings or increased revenue. And it’s just 2 of the 5 secrets discussed in the white paper. To discover the rest, download 5 Price Intelligence Secrets Revealed now.