However, many different types of software and systems are available. Some are reactive and some are proactive. Some solely analyze the sales cycle or initial price point, while others start their analysis in the product development phase. We will explore this ever evolving landscape of price optimization software below.
Before Price Optimization Software
Product Pricing is one of the most difficult decisions retailers and brands make on a daily basis. They ask themselves, “What are our customers willing to pay? Are we leaving money on the table, or is this a markdown waiting to happen?”
In the past, retailers relied on in-store testing, sales history for similar products, and traditional competitive analysis to determine pricing for new products. These methodologies overlooked the most essential determining factor in price optimization: The voice of their customer.
Forward thinking retailers are turning to predictive software in order to understand optimal price points and markdown strategies before their products hit the marketplace. Not only are these tools more effective, quicker, and less expensive than traditional methods at determining pricing strategies, but they can also provide recommendations for value-add features backed up by cost-benefit analysis.