Zone pricing, unlike geographic pricing, enables retailers to segment their offerings into customized price zones developed considering local consumers' preferences, segment-based needs, and price sensitivities.
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4-step Zone Pricing Strategy (Graphic: Business Wire)
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With stores located across geographies, retailers can benefit more by de-averaging their prices to suit the price sensitivities of different customer groups. Opportunely, retailers today have access to huge volumes of transactional data sets generated from their customized programs. Insights from these data sets, when integrated with geospatial data and competitor pricing insights, provides a well of information that can help retailers understand local customer preferences, price sensitivities, and product affinities across stores, categories, and products.
The complexities within the retail sector are poised to increase in the next few years. To succeed in such a scenario, retailers need more than just a robust business strategy to drive sales and enhance customer loyalty. This is where zone pricing in retail steps in, since acquiring a leading a complex and requires retailers to develop superior zone pricing strategies, enhance operational efficiency, invest in targeted marketing and reliable technology.
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At Quantzig, we believe that a detailed understanding of price sensitivities can enable retailers to develop a robust zone pricing strategy that aligns with their business goals. Also, it is expected that pricing analytics will hold a top spot in the business agenda of businesses globally. And to help our clients stay ahead of the curve, we have built advanced expertise and capabilities in the most significant opportunity areas in retail today.
The challenge when developing a zone pricing strategy is making full use of the data while getting to insights that can easily be understood, communicated, and integrated into a multi-channel marketing strategy, says Quantzig.
Speak to our analytics experts to gain detailed insights into zone pricing strategies and their business benefits.
A 4-step Zone Pricing Strategy by Quantzig
1: Categorize customers into price zones based on their willingness to pay: An array of factors impact the customer’s willingness to pay for a specific product. This makes it crucial for retailers to tap into the transactional data sets and categorize customers based on their willingness to pay.
2: Analyze the competitive landscape: To develop a successful zone pricing strategy, its crucial to analyze the offerings and prices for similar offerings. Retailers also need to understand the local pricing strategies adopted by their peers and analyze the importance of each competitor from a business perspective.
3: Integrate category or product level specifications while framing the strategy: Considering category-level specifications is crucial since different products react differently to key market drivers. Accounting for different category dynamics also helps retailers to understand product affinity and price sensitivity of its customers.
4: Invest in suitable technology and analytics capabilities: Investing in suitable technology solutions and proprietary platforms enable retailers to manage front-ends and pricing complexities efficiently. With the help of deep analytical tools, this complicated process can be broken down into simple and scalable processes that drive the agility and nimbleness needed by retailers today.
Quantzig’s innovative pricing analytics solutions combine domain expertise and operational excellence to help retail businesses differentiate themselves from their competitors. Request a FREE proposal to gain comprehensive insights into how zone pricing analytics can help you gain a leading-edge: https://bit.ly/2XWZHLo
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Quantzig is a global analytics and advisory firm with offices in the US, UK, Canada, China, and India. For more than 15 years, we have assisted our clients across the globe with end-to-end data modeling capabilities to leverage analytics for prudent decision making. Today, our firm consists of 120+ clients, including 45 Fortune 500 companies. For more information on our engagement policies and pricing plans, visit: https://www.quantzig.com/request-for-proposal
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