How your market responds to price adjustments, or consumer price sensitivity, should be an integral part pricing decisions. Retail pricing strategy based solely on competitive price points and/or costs incurred will ultimately fall flat as it leaves out the most critical variable in the equation: the customer.
Determine Price Sensitive Items in Your Assortment
The Key Value Item Analysis thoroughly analyzes price sensitivity of your retail assortment. Demand intelligence, volume, and price elasticity are evaluated to group products based on high and low price sensitivity.
With a clear view of each product's sensitivity to pricing changes, you will be able to better understand consumer reactions, make more informed pricing decisions, and implement a more effective promotional strategy.
Key Value Item Analysis Helps Retailers:
- Define item elasticity by zone, store, department and category.
- Identify insensitive items for more strategic role definition.
- Predict impact of sensitivity on overall profit margin mix.
- Determine optimal price points for sensitive and insensitive items.
If you would like to know more about the Key Value Item Analysis, an analytic consulting service for retailers, please submit a request for information.