Pricing Strategies for Retail Recovery

Retailers have been trying to weather the storm through strategic pricing and inventory management, and strategies are continuing into 2009 following a historic low holiday volume. This report provides and interesting insight into how strategic pricing plays a critical role in overall business sustainability and stability strategies.

From CNN Money.com:

"...research shows that holiday sales performance this year and competitive performance in 2009 will decide the tipping point for 'retail recovery' as 80% of companies are challenged by historically higher levels of cost of goods sold and low consumer confidence.

"The last six months leading up to the recent holiday season indicates a shift in value chain priorities and IT investments when compared to the beginning of 2008. Aberdeen's research data shows that during the last 2 quarters of 2008, technology and process spending was geared towards accelerated product campaigns, door busters, and promotions -- in terms of price discounts and frequency, customer loyalty programs, precision merchandizing, and lean inventory management.

"The objective over the last six months within key retail sub-segments such as department stores, fashion, apparel, specialty, and consumer electronics has centered on customer-pull strategies and lean inventory techniques," states Sahir Anand, senior analyst and chief author of the report. "The obvious reason for this strategic shift is to pull through the current tough environment with minimal business risks such as store closings, working capital squeeze, depleted customer satisfaction due to staff cuts, and low margin attainment."

Any insights from pricers in the retail space? What kind of pricing strategies are you implementing to weather the current economic storm? Warmly, EM