This post is part II of our series on Key Value Items, or KVIs. Read Part I here, and other pricing work here. Identifying KVIs as a retailer is complex and hard, but it’s important enough that it must be done right. In the age… Read More »Key Value Item Series II: a KVI to whom?
In prior posts we’ve discussed the varying definitions of the Key Value Item (KVI) in retail. Setting aside the important differences, the core principle remains: KVIs are the most important SKUs in the assortment. And these items often warrant special treatment: competitive price monitoring, out-of-stock… Read More »A tactical guide to finding your Key Value Items (KVIs)
Many of our clients have Minimum Advertised Price (MAP) clauses in their vendor contracts, and we pay attention to developments in the space. When Amazon breaks MAP, it’s often large enough that the rest of the players feel the pain. They call the manufacturer, who then… Read More »Empty Threats, Brinkmanship, and MAP
We’re asked all the time for some good books around analytics, big data, and their applications to business. We love what we do, so after a short poll around the office, we put this together.
The standard definition of a Key Value Item (KVI) is “an item which drives the price/value perception for customers.” But we’ve found a wide variation in the actual interpretation and usage across our retailer clients. In this post (the first of three on KVIs) we’ll lay out four common definitions and grades each of them on how well they can actually be put to use.
Why is this important? Every single time a customer sees a price on your shelf, they update their opinions on your price and value equation. Understanding which products have large impacts and which have small is crucial to optimizing your pricing strategies (both promotion and everyday).
A recent HBR article titled “Understanding Fairness is the Key to Keeping Customers” caught our eyes this week. From the headline we expected another rant on what a “fair” price is, conflating ethics with price setting. We were relieved to discover it’s actually a more tactical guide to the perception of fairness in pricing. Customer perception of a price, whether it can be described as “fair” or not, is obviously one of the key drivers of elasticity, and is ignored at retailers’ peril.Read More »“Fairness” in Pricing
The current state of retailer pricing sophistication is all over the map. Some, with little investment and low organizational adoption, stay in the low-value early stages perennially. Others develop advanced analytic capabilities which, when paired with the broader strategic context, drive huge financial impacts. Setting aside why these disparities exist, there’s value in exploring how they progress from naive to best-in-class.
In the evolution of pricing analytics there are six core capabilities that retailers must master to not only broaden the scope and applicability of the analytics, but also increase the value delivered. The rewards, however, are large: pricing is one of the single most important levers for immediate bottom-line impact.Read More »The Six Analytic Capabilities of Retail Pricing Excellence
Imagine you’re in negotiations for a new job, and the hiring manager says “Well, we’ll throw in the ‘gold’ relocation package instead of the ‘silver'” at the very end, and doesn’t ask for anything from your side. How much different do you think the ‘gold’ package is from the ‘silver’ version?
Another day, another incendiary article up in arms about the fact that two people may see different prices at the same website. The truth of the matter, as usual, is much less exciting as it sounds. We’ve worked with retailers and their pricing strategies as… Read More »Online Price Discrimination: Neither Nefarious nor Unethical