Base Pricing

Base pricing, often referred to as core-pricing or market-based pricing, is the “initial” price of a SKU. It is the price of the product when not connected to a promotion or a markdown–the everyday price. Although base pricing analysis often doesn’t garner the attention it warrants from retailers because it’s not connected to trade dollars and other manufacturer-driven incentives, it presents one of the most significant opportunities for improving performance at the store, cluster or market level.

Pricing transparency, made possible by today’s consumer mobile devices combined with transitioning of the core shopper base from Baby Boomer to the millennial, has made base pricing more important than ever. If a base price, particularly on Known Value Items (KVIs), are out of sync with the market, a retailer is essentially encouraging shoppers to “channel hop,” while programming them to only buy “on promotion.” In other words, shoppers only buy or cherry-pick promoted items, thereby reducing razor-thin margins even more.

The Antuit Advantage in Base Pricing

Antuit brings richer insights into the base pricing analysis effort by combining shopper behaviors and competition based pricing efforts while taking into account product and market price sensitivity. Antuit’s predictive modeling and price optimization enables retailers to understand “tipping points” driven by base prices. Antuit determines the highest price consumers are willing to spend on a given product, on any given visit.