Price sensitivity by consumers is falling, giving retailers the opportunity to offset the potential impact of tariffs by raising prices.
That’s according to recent price elasticity study from First Insight, which found that elasticity and price sensitivity are falling in every category, including womenswear, menswear, children’s wear and home goods when compared to its previous 2017 study.
First Insights’ “Decoding Price Elasticity: Emerging Opportunities” study examined pricing and price elasticity trends on hundreds of thousands of items processed through InsightSuite, the company’s predictive analytics platform, which enables retailers and manufacturers to effectively select, price, market and buy new products with no sales history.
“Retailers must keep pace with changes in elasticity of demand across every subcategory to maintain solid profit margins and achieve financial goals, particularly when facing product cost increases due to tariffs,” said Greg Petro, CEO of First Insight. “Our latest Decoding Price Elasticity study reveals insights into product categories and offers retailers and brands visibility into how best to price a product to meet demand, protect margins, maximize profits, minimize risks and avoid problems with excess inventory, particularly as retailers consider ways to offset the potential costs of tariffs.”