DO CONSUMERS WANT 'PRICE' OR 'VALUE'?
As we live in a very competitive retail environment, it is easy for us, as industry, to apply our primary focus to the retail 'price' of a product. After all, retailers are forever setting prices for their products and doing so keeping in mind what the rest of the market is doing. We often become fixated with our competitors pricing and study the weekly newspaper and online ads vigorously.
The skill of the retailer is to be able to price their products at the level their customers are prepared to pay. This is how, at the end of the day, the retailer attains the weekly Gross Profit margin they require to pay their overheads and make a profit. Every retailer makes their pricing decisions, sometimes daily using a combination of tools to help them get to that Gross Profit margin. Usually, it is the ‘mix’ of their sales that allows them to get to their margin expectation.
Many retailers make their pricing decisions ‘instinctively’ – that is, they’ listen’ to their customers, they ‘read’ the market and they ‘observe’ trends and changes occurring in the marketplace. This module from ALSA Retail Insights will give you the tools to develop a clear strategy in order to maximise margins by product, category or department.