The potential of pricing - KPMG Australia
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The potential of pricing

The potential of pricing

Many Australian retailers are vulnerable to price pressures. They lack the economies of scale of the international entrants and the largest Australian players and many have failed to establish a differentiated positioning that would allow them to resist pricing pressures. We explore how Australian retailers will need to embrace new and more scientific pricing techniques to thrive in the increasingly high-pressure atmosphere of the retail marketplace.


National Sector Leader, Consumer & Retail

KPMG Australia


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Confront the retail squeeze

Price matching or promotional activity are tactics used by many retailers to stimulate customer engagement. However, as consumers become increasingly desensitised to continuous promotion cycles, the fight for each dollar becomes tougher, and margins get tighter. A better solution is smarter pricing or a process called ‘retail price optimisation’. To bring retail price optimisation techniques to the Australian market, KPMG is working with global price optimisation software firm Revionics.

Bring science to pricing

Retail price optimisation analyses how customers respond to different prices in retail channels, and then identifies the prices that will best meet a retailer’s aims – higher profit, for instance. It does this with a mathematical model that adds science to pricing – crunching data on prices, sales, inventories and other important factors. For many, retail is still an art, not a science despite the increasing complexity of their environment due to the impact of technology.

The rewards of smarter pricing

To survive in a world of multiplying challenges, retailers need powerful responses. By bringing retail pricing optimisation into their business, retailers can gain new control over their business and move towards the growth and margins they want.

The potential for pricing infographic

Read the report to find out how customers respond to price changes and steps retailers can take to make customer-centric pricing decisions throughout their business.

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