Definition:
Price benchmarking compares a merchant’s product prices against competitors in the market. It provides insight into how products are positioned relative to other sellers offering similar items.
Benefits:
- Helps merchants stay competitive in their category.
- Supports informed pricing strategy decisions.
- Identifies opportunities to increase margin without losing competitiveness.
Example:
A retailer selling a smart TV checks competitor prices across five stores and finds the average price is $749, while their store sells it for $699. This insight may allow them to raise the price slightly without losing competitiveness.