A key decision for retailers involves setting the proper prices. If prices are too low, then profit margins suffer. If prices are too high, shoppers may patronize competitors. Thus, it is crucial to set “optimal” prices and enact the proper balance of price points.

According to Manthan Systems: “Price optimization is an essential part of the retail game today.  It helps you have better control over your pricing decisions across every category and product type – from fast sellers to perishables. With price optimization, the process of determining the right price of a product has clearly moved away from rudimentary tools and ‘gut-feelings’ to an actual data-backed science. It involves relying on techniques such as demand modelling and ‘what-if’ scenarios to understand the impact of an item’s price on its sales and margin performance – and fixing a price that works for your retail business goals.”

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