Pricing Analysis (URMS)

Overview

The Retail Pricing Analysis Dashboard (Price & Velocity Insights) is focused on understanding how pricing strategies affect product performance in the market. It allows you to compare base prices, promotional prices, and average selling prices across different products or brands, and relate those to sales outcomes like velocity. The goal is to uncover insights such as: “Which price tiers in the category are driving the most volume? Are higher-priced (premium) products selling at lower velocities or vice versa? How do promotional discounts vary among competitors, and what impact might that have on sales?” This dashboard is commonly used by revenue management teams, brand managers, and anyone involved in pricing and promotional planning to optimize price points for maximum revenue and market share.

Key Features:

• Compare Base Price (everyday shelf price) vs Promoted Price across items.

• See Average Unit Price realized (blended price after promos) for each item or brand.

• Analyze Promotion Depth (how deep discounts are) and frequency by item.

• Correlate price points with velocity (units or dollars per store/week) to gauge price elasticity informally (e.g., lower-priced items typically sell more units, but is that true in your data?).

• Identify price segments (e.g., value, mid-tier, premium) and their performance.

Dashboard Components

• Price Metrics Table: A table listing products or brands with columns for pricing metrics and performance. For example, columns might include: Base Price (e.g., $ per unit regular price), Average Price (actual average selling price, which includes promotional discounts), Average Discount % (the average markdown during promotions, sometimes called Depth of Discount), % Sales on Promo (share of sales that happened at a discounted price), and then performance metrics like Units Sold or Velocity. By scanning this, you can observe patterns. For instance, you might notice Brand A has a base price of $5, average price $4.50 (meaning roughly a 10% average discount), and sells 1M units, whereas Brand B has a base of $3, avg $2.50 (~17% discount) and sells 2M units. It sets the stage for understanding how price correlates with volume.

• Pricing Segmentation Chart: Often a chart is provided that groups products into price tiers. This could be a scatterplot of Velocity vs Base Price (each point is a product). You might see an inverse relationship: generally, products with lower price have higher velocity, which is intuitive up to a point. However, there may be outliers – a premium product with high velocity (maybe a very popular niche product) or a cheap product with low velocity (perhaps poor quality or lack of marketing). These outliers are important to identify; they tell you where a pricing strategy might be very effective or ineffective. The scatter or a bubble chart can highlight these dynamics.

  Another possible visualization is a bar chart of velocity by price segment: for example, grouping products into three segments (Value = bottom 1/3 price, Mid = middle 1/3, Premium = top 1/3 price) and plotting their average velocity. This would show, for example, that value products collectively turn faster (which often is the case in high-volume categories) or maybe in some categories, premium turns nearly as fast because of strong brand loyalty.

• Price vs Volume Bubbles: A bubble chart could plot Average Price (x-axis) vs Annual Sales Volume (y-axis), with bubble size representing velocity or market share. This type of chart is sometimes used to illustrate how revenue is distributed across price points. For instance, it may show that the bulk of category sales (big bubbles) are at a mid-range price of ~$3/unit, whereas premium $10+ products are a small portion of volume (small bubbles) despite their high price. It helps answer “Where is the market revenue concentrated? Are we playing in the high-volume price bands?”

• Promotion and Price Relationship: Since promotions affect price, the dashboard may also include an analysis of promo frequency vs price. Perhaps a chart showing % of time on promotion for each product against its base price. Sometimes premium products promote less (relying on brand cachet), whereas mid-tier might promote heavily to drive trial. An example insight: if a mid-priced competitor has an average Depth of Discount of 30% (quite deep), they might be training consumers to buy only on deal, affecting their baseline price perception.

How to Use This Dashboard

• Understand Category Price Architecture: The first thing is to identify the price ladder in your category. List out the base prices: you may see clusters (e.g., a bunch of products around $2-$3, then a gap, then several around $5, etc.). This shows how the category is segmented. If your product is $4 and nearly everything else is either ~$3 or ~$6 (hypothetical), you’re in a “no man’s land” in between tiers. That could be hurting you if consumers don’t perceive the value difference. You might consider adjusting price to fit a clear segment or doubling down on differentiating your proposition.

• Compare Velocity at Different Prices: Look at whether higher-priced items indeed have lower velocities in your data. Often, premium products sell less volume but make up for it in dollar sales (higher revenue per unit). But if you find a premium item with a velocity close to value items, that’s a standout success – it means consumers are willing to pay the premium and still buy frequently. This could indicate a strong brand equity or a product that brings new users (incremental to category). Conversely, if a bargain item isn’t moving volume, maybe price isn’t the issue – it could be a quality or awareness issue (or the category consumers might equate low price with low quality).

• Assess Your Pricing Strategy: If your brand’s velocity is lagging, consider if your price is a factor. The dashboard will show if you’re priced significantly above a direct competitor and how their velocity compares. If the competitor is cheaper and has higher velocity, price could be one reason (though not the only one). On the other hand, if you’re the cheapest but still slower, lowering price further may not help – it could be distribution or other issues. Also, check your Average Price vs Base Price. If your average price is much lower than base (meaning you’re often on deal), you might be eroding your price position – effectively you’re a lower-priced brand than the shelf tag suggests. For example, Base $5 but Avg $4 implies frequent 20% off promotions. Is that intentional? If not, you might be over-promoting. Compare that to others: maybe all brands in the category promote heavily (if average price is ~15% below base for everyone, that’s a norm). Or maybe a certain brand maintains price integrity (base ~$5, avg ~$4.90, very little discounting – likely a premium brand with EDLP strategy).

• Promotion Depth Effect: Investigate if deeper promotions correlate with higher lift or just necessary to drive any volume. Perhaps one brand has extremely deep discounts (e.g., 50% off during promotions) – the dashboard will show their average promo depth. If their velocity isn’t particularly high, they might be “buying volume” inefficiently. That insight might lead you to avoid overly deep discounts if they don’t pay off. Alternatively, if a top brand has shallow discounts (maybe they only ever do 10% off) but maintains high share, that signals strong brand loyalty or a less price-sensitive consumer base – something to emulate if you’re positioning premium.

• Identify White Space: Is there a price tier that’s under-served? For example, maybe you notice there are many value offerings and a few ultra-premium, but not much in the middle. If velocities in both segments are good, a mid-priced offering might also succeed, especially if consumers are looking for a trade-off between quality and price. Or vice versa: if mid-tier is crowded but true premium is empty (no offerings above $10, say), perhaps the market could sustain a super-premium product (assuming value is delivered).

• Prepare for Pricing Discussions: When you go into line reviews or pricing strategy meetings, bring insights from this dashboard. For instance: “Our product is priced 5% above the category average, yet our velocity is 20% lower than the category average. We suspect price elasticity is a factor. A promotional strategy or slight list price adjustment might boost our turns.” Or “We’re at parity price with Competitor X but they outsell us 2:1 – we need to examine their other advantages (distribution, brand awareness) because undercutting on price might not be the best or only lever.” This dashboard provides the hard numbers to back such arguments.

In summary, the Retail Pricing Analysis Dashboard enables a data-driven approach to pricing. It reminds us that in retail, price is more than a number – it’s a strategic lever that influences consumer perception and demand. By examining how different pricing strategies perform in the real world (via velocity and share outcomes), you can fine-tune your own pricing and promo plans. It’s about finding that sweet spot: the price that consumers are willing to pay, that maximizes both your sales volume and profitability. Use this tool alongside the Promotional Analysis Dashboards to get the full picture of price and promotion interplay.