Posts Tagged "Click & Collect"

Window to a greater margin.

During the crisis, the chains have done their homework and their only plan was to survive. The consumer has seen the price of their products more frequent and is accustomed to a greater competitive and promotional pressure that makes the true price of things in time, format and channel.


Given the change in the economic cycle, the best performing operators continue to use basic mechanisms that support good pricing:

– Buy based on a detailed preliminary plan elaborated of PVPs by category of product

– Concentration on a reduced number of PVPs

– Very clear definition of input and output PVP by type of product

– Greater emphasis on PVP most repeated by category

– Objective and systematic monitoring of competitors as references without automatic mimicry

Evolcuion PVP Ropa Mujer

Pricing Rango PVP Vestidos

But this is not enough. The most advanced operators incorporate value management:

– Selective incorporation of intermediate PVP points with higher value products as a real window towards a larger margin

– Management of the perception of the price and not the “mere” reality

– Constant communication of added value with the price both in point of sale

– Greater emphasis on promotional actions of% discount on external brands

– Use of predictive analytics to estimate, in advance, the perception and acceptance by the customer of the product / promotion

Pricing Puntos de PVP

PVP mas repetido

Far from using linear markup in a semi-automatic manner to the assortment, pricing management requires not only a prior plan but also a greater contextualization by type of product, moment, format, location and channel.

PRICING? : We have a plan

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Less is More. Optimize your Assortment

All efforts made to improve Customer Experience will be useless if you don´t make sure first the assortment is optimised. A substantial increase in the number of options turns out to be, in most of the cases, a worrying hint of a lack of clarity and positioning in the retail business that will have a negative impact on results.

Analysing 5 years evolution of women clothing assortment of major retail chains shows how best performing operators manage to keep under control and reduce in some cases the number of options offered in their stores. Source: Market Mapping (Pricing and competitor benchmarking tool)

amplitud surtido mujer

Variety Perception

To make sure the variety is really perceived by the consumer in the store, agreed product display densities have to be respected. Only in this way we will be in the position to communicate good product stories avoiding an excess of individual potential duplicated items.

¿Minimize Risks?

The fallacy of trying to mitigate risks increasing the number of options in the range will end up, with a boomerang effect, in fragmented assortment, excess of inventory and operational problems while merchandising the stores.

Market Mapping

¿Mission: Impossible?

To rationalize the number of options will be difficult if we tried to do it only via commercial planning and buying functions. If we manage to get the structured involvement of design/operations and marketing roles incorporating external objective benchmarks, this will facilitate the task. 

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