Retailers can’t do business if they don’t understand the importance of pricing. Without right price tag, retailers should face goods that stay permanently in the inventory. This will directly affect sales of products. The price must be appealing for customers and it should not result in loss for retailers.
Before the launch of sophisticated tools, pricing managers fixed prices based on previous experience and gut feeling. Merchants also didn’t have to take additional efforts to fix prices as they can handle retail business.
The traditional method was not helpful for most of the retailers who failed to follow their instinct.Merchants tool were not able to clear their inventory during shopping season.
Price management has taken a new direction when merchants started using retail analytics. Pricing products is not an art as science can be used easily. Automated tools, such as Pricing Intelligence – UpstreamCommerce, are now widely used by retailers to get information on point of sale, trends and price optimization.
Retailers can understand and implement pricing optimization with these tools.By automating product management, merchants can also earn profits.According to a recent study, retailers who used analytics tool were able to increase their profit within a year of using the tool and the profit margin continued to increase in the second year.
Automated product management also helps retailers to reduce their expenses and decrease inventory size.Such tools help retailers to increase gross margin.Pricing optimization also directly helps in improving sell through rates.
In order to optimize business operations, retailers have to make initial investment to buy analytics tools.Investment in terms of time is also required as merchants have to learn to use the tool.As profit margins can be increased immediately, retailers should not think twice to invest in such tools.Whether the retailer uses ecommerce software or separate pricing tool, profits can be realized in a few weeks to months. Strategies for Online retailing.
Retailers should also focus on assortment management along with pricing optimization to truly see the results.When integrating pricing lifecycle optimization and merchandising optimization, retailers have to face some hard challenges.This should not stop the retailers from using optimization tools as the benefits are worth the extra effort.