As consumers are getting more stringent with non-necessities such as clothing, retailers are faced with the challenge of running their business such as how to maintain or improve profit margin. The retail sector is currently sales or discount driven to trigger with consumers to spend. Asides from offering the right products to consumers, retailers must always be mindfull when determining the price of their products.
Step 1: Select brands and date range
The first step is to click on the Start Here button under Optimise Pricing Strategy use case.
Step 2: Compare median price and price spread
Next, toggle over “Price distribution by brand.
Referring to the price distribution table the median price of Pull & Bear is USD 26.16 with majority of their products being priced between USD 15 to USD 19.99. However, it is crucial to anlayse further to understand which price range is best accepted by consumer on a category level.
Step 3: Analyse the best price range top3 categories.
The price breakdown by brand table below shows full price SKUs that went out of stock for respective categories with pricing breakdown. The top 3 categories that registered highest amount of full price going out-of-stock are outerwear, tops and jeans. With this information, it tells you which category that is different the full price business.
Now, dive into respective categories to identity the best price range for each category. Looking into outerwear, 48% of its SKUs were sold between USD 20-30 followed by USD 30-40. This indiciates that customers are willing to pay at such price points for outerwear.
Understanding deeper, majority of the outwear comprised Knitwear and sweats which were dominantly sold at USD 20-30.
Click into knitwear & sweats USD 20-30 to view through the product list. Analyse the product attributes that drove. This would help you to understand why customers are willing to pay the product at that particular full price. Take note of factors such as product material, design complexity, prints and etc.
You can replicated the above steps for the other top categories and subcategories.
With insights collected from this analysis, you can now strategically price your products to ensure it is competitive in the market. It can also help you with your assortment planning as you now know what your customers are buying from your competitors. Blindly pricing your products based on markup or ideal profit margin may lead to the product being discounted as the price you have set may not have the same perceived value as your customers. This will then lower down your profit margin and driving away your customers.
Hope you found this article helpful! If you have any questions or would like to explore the Omnilytics dashboard further, feel free to reach out to your respective Client Success Manager.