Ahan Analytics, LLC Thought Blog - Thoughts on making practical use of analytics
Jun
20

Changing pricing and merchandising strategies in retail

written by Dr. Duru

Stephanie Rosenebloom writes in the New York Times: In Recession, Strategy Shifts for Big Chains (June 20, 2009). Retailers continue to re-engineer the industry to maintain positive profitability. The recession has forced the hand of several major retailers to bring prices and product offerings in-line with the new frugality of consumers.  Luxury retailers are broadening the product mix to include more mid-priced product.  Mid-tier retailers are offering fewer product options but trying to make up for it with premium service  levels. Most interesting: “One of the biggest changes consumers are likely to see is greater personalization and regionalization of merchandise.” Looks like more progress for the concept of “mass customization.”

Where margins are already slim, pricing strategies have limited ability to enhance competitiveness. Retailers are doing well to re-orient their supply chains around getting the right product at the right time to the right customer. Wal-Mart has been doing this for years by empowering employees at individual stores to report on merchandising needs.

It will be worth monitoring the changing landscape in retail for lessons in other high-touch businesses.

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