The prices on home improvement products are growing, and so are retailers’ efforts to keep those prices competitive and retain customers. Price continues to be a key factor consumers consider when choosing where to shop.
Over the years, product pricing has evolved from simple item markups to present-day dynamic pricing, which uses real-time data to make rapid and continuous price changes online.
Independent home improvement retailers have adapted pricing over the years to compete with big-box stores and Internet retailing. As online marketplaces, such as Amazon, master and fine-tune dynamic pricing models, other retailers continue to use aggressive and strategic variable pricing models to increase margin on some items and compete head-to-head on others.
These competitive strategies are important because retailers are indicating that prices have trended up over the past year, according to data from the NRHA 2015 State of Pricing Study.
Applied to Retail: Certain market forces, such as inflation and minimum wage, are out of retailers’ control, but store owners can still adapt their prices and remain competitive with the big boxes with careful variable pricing.
Hardware Retailing’s “A New Generation of Pricing” story addresses the evolution of pricing and provides examples of retailers who remain relevant to consumers in today’s price-sensitive world.