Price Elasticity

Decoding Price Elasticity to Optimize Revenue

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First Insight examined pricing and elasticity trends revealing that many retailers and brands
do not fully understand how to adjust pricing to respond to elasticity across many retail categories.


First Insight helps retailers and brands meet shoppers at the intersection of price and elasticity, providing data that empowers them to identify and act upon the greatest opportunities to increase sales and revenues with the least amount of risk.

The result of this analysis is a tool which enables retailers to better understand pricing opportunities and risks.

Categories with above-average price elasticity are colored orange and categories with below-average price elasticity are colored blue.

The First Insight Elasticity Study found that:

  • Womenswear, a well-managed opportunity, is seeing decreases in elasticity and represents opportunities for retailers to maintain or increase prices, particularly in swimwear where shoppers are becoming less concerned with price.

  • Sales in the menswear category are increasing according to recent U.S. Census data, and retailers have been effectively balancing price with increasing elasticity overall, making the category a well-managed risk.
  • Research shows that while overall sales of childrenswear are falling, some brands and retailers are seeing significant growth. This is in line with First Insight’s report which found that elasticity is falling along with pricing, making it a poorly-managed opportunity. Sleep/loungewear in particular has shown declining elasticity as well as moderately falling prices, which makes it primed for price increases.
  • The home goods category, traditionally the least elastic, is seeing a significant increase in elasticity as buyers become more sensitive to price changes, consistent with the increase in cost-conscious Millennials buying and furnishing their first homes.

First Insight Elasticity Report:
Decoding Price Elasticity to Unlock Revenue and Minimize Risk