Price optimization has fast become an essential tool for retail success and profit. In its briefest form, the magic formula for retail success is: "Price right, discount less, and manage your inventory for reality." In longer form, retailers' use of price optimization solutions employs science to harness big data and turn it into profitable insights: Insights to help determine the optimal price and time at which a product should be sold in order to attain maximal sales and greatest margin.
Whether a retailer has one million or ten million products, the strategic pricing adjustment on each is helping retailers recapture revenue they've, until now, been squandering and leaving on the table. It is also providing a huge bonus of helping retailers develop more effective supply chains.
Using intelligence solutions such as retail price optimization, retailers can accurately and effectively:
-- Set initial prices.
-- Determine the timing and size of markdowns.
-- Decide the amount and type of promotions offered to different shopper segments.
-- Factor price optimization solutions into assortment, order management, and inventory availability.
-- Optimize prices within and between channels.
-- Increase (and make more consistent) pricing in online traffic.
-- Improve conversion rates.
-- Maximize margins or moving distressed or slow-moving merchandise.
Bottom line for your bottom line:
Having the right intuitive, user-friendly pricing intelligence solutions and using them correctly and wisely is the key to the future of retail.
In its shortest form, the magic formula for retail profit can be boiled down to: "Price right, discount less, and manage your inventory for reality."
For the long run, retailers are recognizing greater profitability through improved sales and margins using price optimization tools to gain insights and to optimize pricing and promotion decisions.
Dr. Shai Geva, co-founder and CTO of Upstream Commerce Retail Intelligence Company says: "Price optimization is the best technology so far for retailers to ensure that their pricing is always optimized to generate greater sales and ensure optimal profit margins."
The main reason you don't see more case studies and kudos telling about the present attraction to, and use of, price optimization, is because pricing strategy is a highly competitive procedure that each retailer holds close to their vest.