November 07, 2019

Oh, There's A Pricing Thing Going On Here

Here was our business from yesterday ... and it's clear that volume shifted out of early November into the Cyber Monday window.

But what about pricing issues? Did this company discount everything, or did this company do something clever to manage Cyber Monday?

Let's look at the average price per item sold:
  • November = $21.26.
  • Thanksgiving - Cyber Monday = $21.38.
  • December = $21.87.
Nothing that's too big of a deal there.

Let's look at the percentage of items sold that are classified as a "Winner".
  • November = 74.4%.
  • Thanksgiving - Cyber Monday = 70.6%.
  • December = 74.0%.
Now that's interesting, don't you think? It's obvious that somebody decided to feature a non-winning item, or a series of non-winning items.

Let's look at the percentage of items that were sold below their historical average selling price.
  • November = 27.2%.
  • Thanksgiving - Cyber Monday = 33.6%.
  • December = 23.5%.
The picture is more clear now, isn't it? This brand is selling non-winning items at a discount. 

Is there a price point where this is happening? Yes! Let's look at items > $50.
  • November = 25.5%.
  • Thanksgiving - Cyber Monday = 31.2%.
  • December = 29.6%.
To manage the Cyber Monday window, this brand marked down expensive non-winning items.

Would you shift demand out of early November into the Thanksgiving - Cyber Monday window and then feature non-winning high-price-point items sold at a discount in an effort to protect gross margin dollars? Maybe. You'd have to perform the analysis to see if that's the right thing to do, correct?

But at minimum you should perform the analysis, correct?

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