High competition, consumer price sensitivity and pressure on margins are the key challenges that a retailer face everyday. Optimizing product price has shown direct correlation with volume sales and thus with the sales margins; it is one of the most direct routes between analytics and the bottom line. It is designed to enable retailers to optimize base prices to achieve their sales, volume, profit and price image objectives for regular, everyday items.
Rudder Analytics leverages point-of-sales data to run probability and forecasting algorithms to create a set of demand curves for SKUs in particular stores or clusters. The demand curve identifies the products that are the most and least price-sensitive. Additional optimization routines leverage these demand curves to determine optimal recommended pricing.
Common Business Questions answered by Pricing Optimization:
1. How can I price my brands to increase the overall portfolio growth?
2. What is the impact of competitive price on my brands?
3. Which products or brands are highly price sensitive?
4. What are the right price points to maximize the sales?
5. What is the right mix of Price discount and marketing activity?