November 14, 2022

By Year of Introduction

This example is from the pre-COVID era ... and the example didn't turn out the way I expected it to turn out.

When I looked at the percentage of sales at/above the historical average price point for an item by year of item introduction, I expected the brand to discount items more and more as the item aged. I didn't expect this:

Some of the trends make sense to me. Newly introduced items (look at 2016 / 2017 / 2018) are more likely to sell at full price than are older items. This happens all the time ... older items are discontinued and are consequently discounted.

2019 looks different - you can see that this brand made a solid effort of re-establishing price integrity after several years of discounting.

As many of you are experiencing in 2022 ... when prices go up (either due to the end of discounting or because of cost of goods sold increases), response goes down. That's how this stuff works. Eventually, you land on a local maxima where pricing is theoretically optimized ... until it isn't once again.




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