Situation
In the mix of today's uncertainty, wholesalers must be spot on when it comes to MSRP pricing. Establishing the highest possible price point where demand is met is critical for a business to optimize its margins.
A footwear wholesaler, offering a $24.99 ballet flat, was met with resistance from a critical retailer. The retailer believed the ballet flat should be positioned at $19.99 instead in order to be successful.
Action
The footwear wholesaler ran a test through First Insight's price optimization software, evaluating all ballet flats with the increased ticket price of $24.99 to determine if their customer base would accept the higher price point.
Outcome
Results generated from First Insight's voice of customer software revealed strong consumer demand at the increased ticket price.
The ballet flats performed above expectations and became the top performing shoe type in their Women's Footwear Category, earning an additional $5 per SKU with a positive 1st QTR result of a 25% lift in revenue and a 50% lift in profit.
