What are pricing trends in the industry?
In the retail industry, pricing trends change over time. During different seasons and holidays, the trends vary and may shift upward or downward. We try to predict future movement of a stock or company based on past trends and data that have been collected and obtained. "Trend analysis is based on the idea that what has happened in the past gives traders an idea of what will happen in the future" (investopedia).
For example, pricing trends have been pretty stable lately and stores are realizing from the pricing trend being stable, they have not been bringing in enough business and must push prices upward. Trends in a time where the economy is not doing well have shown in the past that prices increase. "Retailers are raising prices on merchandise an average of 10 percent across the board this fall in an effort to offset their rising costs for materials and labor" (wsj). This has not always proven successful in the past considering that consumers do not have the money to spend on these goods and especially at such high prices. Retailers now are trying to raise prices just enough to get more money and keep customers. Pricing trends during good times remain consistent to what the company is reputable for. For example, Walmart, a discount store, will not push up an retail prices and keep their usual low cost items for customers to buy. They have done well and their pricing trends stay the same.
Trends sometimes change due to other things than just recessions and hard economic times. Trends may change because of holiday seasons. We have seen that consumer spending is way higher in December and therefore, companies push prices up. Yearly, we see that companies do sell their goods and these higher prices and trends are created. We review the records and the consistency of sales proves that each year it is okay to keep prices high during holiday seasons.
Overall, pricing trends in retail take a turn for the better and for the worse at times but thats what a trend is all about. We review past history and it's patterns so we can navigate our future and what to predict for sales and our economy.
http://online.wsj.com/article/AP677949c8db7440048048ff7df9b20e58.html?KEYWORDS=pricing+patterns+in+retail
http://www.investopedia.com/terms/t/trendanalysis.asp#axzz1a9KEN62o
Falen's post about pricing trends increasing during the holiday season goes hand in hand with my post about current events. While prices are expected to rise during the holidays due to projected sales increases, consumers won't be buying as much this season as they have in previous years which could pose a problem for retailers. Falen mentions the hard economic times being a factor in pricing trends which is a great point. While retailers must raise prices to keep up with increased production costs, consumers are buying less and less which poses a major problem. The uncertain economy is creating problems such as these constantly in the retail industry and continues to pose a threat to retailers.
ReplyDeleteI was reading an article in the NYT and it was closely related to this. It talked about the extremely high end apparel. The article talks about how these extremely expensive items are still selling out of stores. Also, how the stores are marking them up even higher. So a pair of shoes that are 600$ would be marked up to 680$. The shoes still sell out because the people who are buying them can afford to spend that much more money.
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