For electronics sellers, every year brings new model TVs, laptops, and cameras. The new models typically have improved connectivity, better screens and exciting new features. While consumers always want the latest and greatest, retailers find themselves in a bind, wanting to clear their inventory of previous year’s models while capitalizing on the excitement of the newest models.
There are plenty of retailers who take the approach of clearing out old inventory through significant discounts. However, most retailers would prefer to develop a pricing strategy that delivers profitability while clearing out yesterday’s inventory.
A Disciplined Approach
One strategy which we’ve seen successfully applied requires retailers to maintain MSRP pricing on all new model merchandise until their previous year’s models are gone. While it is tempting to discount new products to drive store traffic, those discounted items will further erode the value of last year’s products, making them more difficult to sell at a profit.
Meanwhile, using the Quicklizard AI-based dynamic pricing engine, electronics retailers can identify profitable price points for last year’s merchandise. While calculating the price, the system considers competitive prices in the market, as well as the speed in which the retailer wants to unload the products.
By taking this approach, retailers are setting themselves up to profit on their existing merchandise. Once they’ve exhausted all of last year’s inventory, they can begin applying their standard pricing and sales strategies to their updated product models.