Question

Retail Pricing Approaches

20 Apr 2018
Answer :
Word Count : 264

Retail pricing approaches play a crucial role in the success of a retail business, influencing consumer behavior and overall profitability. Retailers employ various strategies to determine the prices of their products, tailoring their approach to meet specific business goals and market conditions.

One common approach is cost-plus pricing, where retailers calculate the production or procurement cost of the product and add a predetermined profit margin. This method provides a straightforward way

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Related Questions

What are various formats of Non-store Retailing ? Discuss any two of them in detail.

Describe various mechanisms of maintaining uniformity in retail operations.

What are the various ethical dimensions of retailing? Discuss the linkages between legal and ethical issues in retailing and the precautions preventive measures to be considered.

 

Retail Pricing Approaches

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What is the role of Technology in retailing? Discuss the application areas of technology adoption in retailing and its security issues that ought to be taken care off.

: Small retailers have a lot going on for them. For one, they’re perceived as being trustworthy. Several people visit these stores not just for the products in question, but for the experience of shopping at a place where your name is remembered, your kids are acknowledged, and your requests are met.

 

Perhaps the best way for these small retailers to stabilize themselves is to use these positive reference points. With technology, expansion and wider reach is a possibility, but how do you ensure that the same warmth in customer interaction reflects across multiple channels and stores? In other words, how can you be a mom-and-pop store with a global outreach?

 

Technology enables a situation wherein a machine performs tasks that can be executed repeatedly with a standard set of instructions without getting tired, thus letting the human mind function and focus on what is more important.

 

Especially in retail, technology gives you the platform to better satisfy your customers by helping you concentrate on their needs. And happier customers mean more business.

 

These tools don’t simply reduce your overhead and improve your planning. They’ve become essential tools that can provide you

with a competitive edge to thrive and grow in the market.

Here are seven ways technology can improve your retail business (Application areas)

 

  1. Reduce inventory costs

An inventory control system is now a basic tool for retail management. It allows you to know what merchandise you have on hand and on order, and how many of each item you have received and sold. Once setup, these systems automatically update your database when products sell or move from one location to another—from a warehouse to a store, for example. They also provide a variety of instantaneous data analysis tools to keep track of your business. Once online, every aspect of your stores’ performance is at your fingertips. Select and view products by cost, price, margin, first or last date sold, date received or UPC codes. In minutes you can create new categories with hundreds of subcategories of style, size or color.

 

  1. Improve customer satisfaction

Customers expect you to be able to tell them if you have a product in stock or on order. They don't want to wait while you wander through the storeroom or phone the warehouse. Having an electronic inventory system allows you to answer customer questions with

 

 

3. Automate your inventory control

Electronic inventory control can eliminate over-ordering and under-buying by referring to each store's sales history to calculate the optimum stock levels for each item. You tell the system how many days of supply you prefer—which you can modify, for example, according to the season—and the system will look at past sales patterns to determine when you need to re-order. Your system can also perform "open to buy" calculations that tell you how much to spend on particular store categories for maximum

return.

 

4. Facilitate inventory control

Internal theft and pricing errors can eat up about 4% of retail inventory. A portable terminal offers much greater speed and accuracy than manual counts. The system immediately flags discrepancies with recorded inventory levels and verifies pricing, making it easier to detect pricing errors and missing merchandise on the spot.

 

5. Keep track of your margins

Your inventory control system can suggest pricing and markdowns within your pre-set parameters, and/or track your margins based on the prices you enter. It will also ensure you are always aware of gross margins. Even with special pricing offers, you never lose track of your margins. You can establish different pricing for different stores across geographic regions, for instance, and for preferred customers such as employees or major buyers. You can also pre-set markdowns for end-of-season or other sales. The system continues to track gross margin, including the effects of markdowns and preferred pricing.

 

  1. Improve your forecasting

Automated statistical forecasting systems create far more calculated and accurate demand forecasting. • Past sales data, forecasts, and future orders are all on one system. As a result, more accurate forecasts can be made based on the totality of this information.

 

    • Forecasting systems can reach the desktop of every line manager, bringing chain-wide input (if appropriate) into the process through interactive Web-based applications.
    • Forecasts can then be further adjusted, taking every aspect into account.
    • Automation facilitates fast projections and scenario planning.

 

  1. Adopt a just-in-time relationship with suppliers

Forecasting tools work in tandem with a central database, inventory control and sales systems to tie purchasing more closely to actual customer demand. The result is an opportunity to reduce inventory and adopt a just-in-time relationship with suppliers.

 

The Top Security Challenges Facing Retailers

 

Retailers are increasingly using technology such as in-store Wi-Fi and Internet of Things (IoT) initiatives to improve the customer experience. This can be a huge differentiator for the retailer, but can also lead to unanticipated security challenges – something retailers should be especially wary of in light of seemingly daily news of data breaches. Through advanced threat monitoring, Zensar has identified the top vulnerabilities that retailers should be aware of to safeguard their business and protect custo mers from threats.

 

  1. Wi-Fi – Many retailers are leveraging public Wi-Fi to both offer a convenient service to their customers, and in an effort to increase sales and gain valuable customer data. At many organizations, Wi-Fi is in “set it and forget it” mode. Wireless networks are also often deployed and managed by the marketing team, and lack of oversight from the IT department can have major consequences, as these networks may be unencrypted and dangerous. Wi-Fi should be properly secured and consistently monitored.

 

  1. Internet of Things – Research firm Markets and Markets found that the retail IoT market will be worth more than $35 billion by 2020, as retailers invest in IoT to manage inventory, track theft and loss, enable mobile payments, provide shopper

intelligence, and create insights for advertising and marketing inventory. IoT creates new challenges for retailers, which need to ensure that every endpoint within the organization is secure. It is important to take a close look at what security solution is running on endpoints, and to re-evaluate this periodically by looking at what competitors are using and any new solutions available on the market.

Illustrate the significance of atmospherics in retail marketing mix and enlist the components of atmospherics.

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