Situation
Supply chain disruption, inventory inconsistencies, and overall economic uncertainty have become today's new norm.
A home goods retailer wanted to evaluate the impact of ticket price increases on its premium mirrors category due to rising costs in production and shipping. The merchant team was focused on optimizing sales by using price optimization software to maximize ticket price without losing customer demand.
Action
The full product offering of premium mirrors was tested to determine if the consumer would bear higher ticket prices. Both classic/traditional and industrial styles were tested to see which ones resonated more with their target customer segment.
Outcome
Increased Initial Ticket Price
Classic/traditional styles outperformed industrial styles. The results also revealed that customers are willing to bear a higher price for classic/traditional styles. First Insight's retail optimization tools helped the home goods retailer increase their ticket price, which lead to a +25% lift in planned sales.
Better Inventory Buy-Depth Decisions
Merchants used the results to inform the buy-depth decisions for both aluminum mirrors and other traditional styles by using First Insight's value score to predict customer demand and sell-thru. The retailer was also able to avoid buying excess inventory for the lower-performing products in the results.
By using predictive analytics and voice of customer tools to inform product and pricing decisions, retailers can stay agile during economic uncertainty.
