How Retailers Can Increase 46% in Revenue Using Pricing Intelligence

Posted by Shipra Dubey on Thu, 13 Nov 2014 18:56:20 GMT
How Retailers Can Increase 46% in Revenue Using Pricing Intelligence

Pricing Intelligence is a must follow practice if you want to increase sales and maximize profits. It gives you the rules and data points to respond to the market changing prices. Here is the details analysis and to help you understand how you can increase the revenue using pricing intelligence.

Pricing Intelligence can help you analyze your prices against your competition at the right time and change the margins accordingly. Example a retailer might be quoting the price which is lowest for a mobile say Rs. 14500, while they realized their competitor is quoting it at Rs 15200.(Doesn't this is the right price raise opportunity?) And you can increase the price making it to Rs.15000 while still being lowest in the market but increasing the margin by Rs.500(Increase in revenue). Thus it is said the intelligence rule is not to price it to the lowest but more competitively and optimize correctly.

If you following the daily market trend, pricing intelligence could help you timely understand the volume is the price ratio, hence giving you a fact based conversation with suppliers and negotiate better. Example a vendor gives the product X at a cost of 10000 INR to retailer A while the same product was given to the competitor at a cost of 12000. Reason could be many like based on order size, commission offered or mere good faith. The retailer B could hence re-negotiate this with the vendor hence bringing down the price and simultaneously increasing the revenue.

It also help retailers, where they don't sell product their-self instead marketplace. You can offer more competitive intelligence report to your sellers and ask to be competitive in price to increase 46% in sales.

Take eCommerce business to new heights using Competitive Pricing Intelligence

Through Pricing Intelligence a retailer would know in advance about the demand in the market for their products, and can decide their prices accordingly. If the retailer knows that the demand for product X is going to rise in the market he could stock it in advance hence catering to the demand and adding on to the sales hence the revenue.

Pricing intelligence will help you increase the revenue as the Retailers today use pricing as a lever for two primary purposes: driving the demand and maximizing the gross margin. (e.g Xiomi Redmi 1S unit sale on Flipkart) And the lever is being pulled more frequently than ever: with companies like Amazon, Flikart and Snapdeal changing the prices on an average nine times per day, it is surely evident that you need to have a constant eye on the market trend to you have a strong hold.

Pricing intelligence could surely help you increase revenue as it helps you to attract the price sensitive customer pool. While you cut down on the margin you improve on the sale and numbers, eventually increasing the margin and revenue.

Pricing intelligence helps you timely understand the market and the competition, makes you well aware of the dynamism of pricing and thus make the right pricing strategy. Thus if you have a competitive pricing the revenue increases vice-versa.

Since the analysis gets you to validate, if you on the right path or a total revamp is required you could take the decision for the right strategy well in time. A regular pricing planning, forecasting and management are needed for the ship to sail through.