Retail

Pricing Challenges and Opportunities

Through most of history, pricing has been personalized and dynamic. This is still the case of bazaars and food markets where prices vary depending on face to face negotiations and time of the day. Fixed retail pricing was an innovation of the 20th century, perfect for the mass market era when merchants could no longer know each customer well. In fixed retail, pricing is assisted by market surveys prior to the launch of the product or a major change of its characteristics.

Now, Intelligent Pricing technology can help global retailers fine tune the calculation of prices based on the continuous analysis of sales data. The system processes on a daily basis the sales figures for thousands of products in hundreds of sales outlets and cross references these figures with the prices actually applied and other variables impacting sales such as, promotional incentives, advertising, and product positioning. This allows businesses to model price elasticity and cross-elasticity within each product category. The result for global retailers is an optimized contribution margin by unit of time.

Benefits of Open Pricer technology

• estimate the elasticity and cross elasticity within one product category
• recommend the optimal setting of prices