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The Second Retail Price Comparison and What it Found

Posted On - 29/10/2013 11:20:19

Why does Target stage the Retail Price Comparison (RPC)?


The RPC: Probably the Best Business Advice There Is
We do the RPC (Retail Price Comparison) for many reasons - you need to maximise profits without profiteering and we genuinely want to help you would be a couple. And the video tells you about many more. But if you asked us to pin-point the one thing that sparked it into life, that galvanised us to get 100% behind doing it, it was customers asking: "what should I sell this for?"

Being asked our opinion on your RRP is truly flattering. That you trust us enough to advise you on something key to the success of your business is frankly humbling.  But that's what also makes it awkward and something that we need to take exceptionally seriously. Because poor advice could damage your business. And that wouldn't just harm our reputation with you and cost us business, it could tarnish us more widely.

It was this dilemma – genuinely wanting to help but feeling extremely cautious about doing so – that crystallised our thinking about how we could. And the answer was surprisingly obvious. If we were to profess on pricing we'd have to research it anyway. So why not just collect and publish the data? And rather than declare RRP's why not extend the research to ask what prices sell best? So the RPC (Retail Price Comparison) was born. To find out more about how its actually done and administered, see the video.

What did the 2nd RPC find?

Generally, price competitivity with the Big Chains has widened, quite dramatically in some cases as the video details. But the position with PC World has closed. Does that imply a problem? It's genuinely hard to tell - have they slashed prices, you raised them or a bit of each? We have no way of telling. But we do know a couple of important things.

First, over half those who took part in the first Comparison took part in the second. Those businesses will have seen opportunities to increase prices 1st time round and that may have contributed to the gap closing.

Second, since price is a recurring theme on shoptalk, it's likely many of you are taking the advice and looking for opportunities to nudge prices up. You're taking on-board it's easier and less risky to raise prices than you might have previously thought. That might be contributing too.

This last point – that raising prices is low risk - has been reinforced by the second Comparison. It supports the relationship between price and sales as being virtually flat within sensible limits and the video explains this - price elasticity - in far more detail. In other words the data – not opinion or logic - shows raising prices has ‘no' impact on sales. It won't push your sales of a cliff. But by the same token, lowering prices doesn't have any impact either. It's by no means a sure fire way of getting customers flocking to you.

The survey also gave three insights into opportunities to make more money. Products offering good levels of sales satisfaction that half of you don't stock. Products offering truly outstanding sales satisfaction 25% of you don't stock. And low cost products that'll open up your range and increase your appeal the majority of you don't stock. See the video for the detail on what these are.

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