Specialty Prices Need Work
Business Forum
GDA Staff -- Gifts and Dec, 10/21/2010 4:27:19 AM
Are you the next contestant on The Price Is Wrong? New data from Retail Systems Research breaks out how pricing differs for small specialty retailers. RSR found that small specialty stores are under more pressure to improve the bottom line than retailers overall - 92 versus 75 percent. They're also more concerned with protecting their brand's price image, 44 to 27 percent. They find it harder to get good data even on their own sales: 84 percent consider measuring the impact of pricing decisions one of their top three challenges, compared to 72 percent overall.
When it comes to making those pricing decisions, specialty stores are more traditional: many more of them stick to manufacturer's suggested retail prices, and many fewer use hi lo, key item and discount strategies. As a result, RSR says specialty retailers have even better opportunities than retailers in general to improve margins, create more profitable promotions and match supply to demand.
What's getting in the way? Too much to do, lack of a single software solution and connecting money to merchandising. RSR sees better results when pricing is a separate job than when it is handled by the buyer. RSR finds that specialty stores lead the pack in product movement and customer data warehousing, replenishment forecasting and store task management technologies. But they're way behind in adopting rules based on pricing engines, regular price optimization and end-to-end price lifecycle management.
The takeaway: if you've got too much to do and your buyer does your pricing, get your money manager involved, invest in software or both - or you might be leaving money on the table.
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