Retailer Uses Predictive Analytics, Raises Prices 33% While Maintaining Demand

Situation

Effectively pricing products can be a tough decision, especially when you're the middleman. Factors such as consumer demand and wholesaler calculations play a huge part. Wholesalers can stay competitive with retail product pricing tools to equip retail partners with optimal initial pricing backed by predictive analytics. For instance, a footwear wholesaler wanted to assess whether they could price a boot at $29.99 when the retailer believed the boot would only sell for $19.99.

Action

The wholesaler decided to run a test with First Insight's price optimization software to evaluate what the optimal initial price should be. A test was conducted with their target audiences at a price of $29.99.

Outcome

Consumers saw great value in the boots at $29.99, and results did not show a decrease in overall demand. The wholesaler's sales team was more confident presenting the campaign to the retailer at $29.99 and convinced the retailer to invest in the boot program with the higher ticket price of $29.99 (vs. $19.99). This allowed both the retailer and the wholesaler to obtain higher margins, as the production cost of the boots remained the same, while still maintaining demand.

About First Insight???

First Insight is the global leader in Voice of the Customer retail solutions, transforming business decision-making through actionable consumer insights and AI. Our platform enables retailers and brands to boost revenues and profitability by informing strategic decisions with consumer data and removing guesswork. Trusted by hundreds of leading retailers, vertically integrated brands, mass merchants, and wholesalers, First Insight leads in optimizing strategy, product, pricing, and marketing decisions.

Visit www.firstinsight.com to learn more, or if you're interested in harnessing the power of First Insight's Retail Decision Platform for your business, let's talk!