The value of pricing products is known by all retailers. By fixing the right price, any retailer will be able to sell most of his inventory. This skill will help a retailer to make profit or loss. The price fixed on products should attract customers and generate profits at the same time.
Pricing was once an art where retailers followed their intuition and experience to fix prices. Merchants too fixed prices depending on the retail business. Not all retailers were able to succeed with intuition and experience. Merchants too had to deal with surplus inventory after shopping seasons.
Merchants have started using retail analytics to manage prices. Pricing which was considered as an art has now become a science. Software tools provide point of sale data, trends and optimal prices across multiple stores and retailers can use this information.
Pricing optimization can be achieved by retailers who use these tools. Merchants too can generate returns on their investment by using software for product management. Studies indicate that retailer will be able to increase his profit margin right from the first year of using this tool.
It was also possible to reduce inventory size and minimize expenses with automated product management. Gross margin increase is experienced by retailers who use these tools. Sell through rates can also be improved with pricing optimization.
Pricing Blog. To get pricing optimization right, retailers have to invest first in best software tools. Merchants should learn how to use the tools in the right way and this can take some time. Considering the increase in profit margins, retailers should not hesitate to invest in these tools.
Return on the investment can be generated very quickly in weeks or months depending on the ecommerce software solution or standalone pricing tool used by the retailer. Upstream Commerce.
Pricing optimization should be coupled with assortment management to get quick results. The challenges posed by integration of pricing lifecycle optimization and merchandising are quite difficult to handle. However, retailers should move forward as the benefits of optimization are too good to ignore.