Pricing Strategy in LPO

A pricing strategy is a set of one or more rules applied at the merchandise and location level to achieve a specific business objective. LPO enables retailers to define and apply tailored pricing strategies, ensuring that all relevant rules work together to generate price recommendations aligned with their overall goals.

For example, a regular pricing strategy may combine:

• A competitor match rule (ensuring prices align with key competitors).

• A margin floor rule (preventing price reductions that affect profitability).

• A rounding rule (ensuring customer-friendly pricing).

A markdown strategy may include:

• A markdown phase rule (defining phased markdowns over time).
• A minimum price threshold rule (preventing markdowns below a certain value).
• A sell-through target rule (adjusting markdown depth based on inventory movement).