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Technology | 12.21.22

Win Big with Your Pricing Strategy

Why the Cost-Plus Model Doesn’t Work for Modern Retailers

Many retailers rely on an outdated cost-plus pricing model when setting their pricing strategy- but this antiquated approach doesn’t consider modern market trends, like competition and consumer demand. Thankfully, there is a more practical option: competitive pricing intelligence. Read on why the traditional cost-plus pricing method doesn’t cut it in today’s fast-paced marketplace.

What is Competitive Pricing Intelligence?

Competitive pricing intelligence (CPI) is an approach that enables retailers to make informed decisions about product and service pricing that are in line with current market conditions. By using CPI, retailers can identify their competitors’ price points and adjust their own accordingly—and quickly respond to any changes in those price points. This strategy helps retailers stay competitive without sacrificing margins or profits.

It’s also important to note that CPI is more than just tracking competitors’ prices. It also considers consumer demand for a particular product or service and other external factors such as seasonality and geographical differences in sales trends. This means that CPI can help you tailor your pricing strategy to be more effective for each market segment you serve. For example, you could use CPI data to offer discounts on winter clothing during peak shopping in areas where cold weather is typical but not elsewhere.

The Benefits of Using Competitive Pricing Intelligence for Your Pricing Strategy

Using CPI has several benefits over traditional cost-plus models. For starters, it allows retailers to track dynamic changes in their competitive landscape and respond accordingly instead of relying on static figures like cost or margin. Using a CPI pricing model also helps retailers better understand which items are selling well and why they are in demand. Then, they can use this information to improve their overall pricing strategies over time, ultimately leading to higher profits and happier customers.

1. More Accurate Pricing Strategy

Cost-plus pricing can often lead to inaccurate prices, as the cost of goods can fluctuate and is often difficult to predict. This can lead to lost sales and missed opportunities, as customers may be turned off by prices that are too high or too low. Competitive pricing intelligence, however, can help you price your products and services more accurately. By keeping track of what your competitors are charging, you can ensure that your prices align with the market and adjust your pricing strategy accordingly.

2. Greater Flexibility

Another benefit of competitive pricing intelligence is that it allows for greater flexibility. With cost-plus pricing, you are locked into a set price point based on your costs. This can make it difficult to respond to changes in the market or take advantage of new opportunities. With competitive pricing intelligence, you can quickly and easily adjust your prices up or down based on changing market conditions.

3. Use Your Pricing Strategy to Increase Profits

Competitive pricing intelligence can also lead to increased profits. By understanding what your competitors are charging and ensuring that your prices align with the market, you can avoid leaving money on the table. Additionally, by quickly adjusting your prices in response to changes in the market, you can maximize your profits and take advantage of new opportunities as they arise.

4. Reduced Marketing Costs

Finally, another benefit of competitive pricing intelligence is that it can help to reduce marketing costs. By understanding what your competitors are doing in terms of pricing, you can adjust your own marketing strategy accordingly. Additionally, by monitoring your competitors’ prices regularly, you can avoid wasting money on marketing campaigns that are not effective.


Competitive pricing intelligence is quickly becoming the go-to approach for setting item prices among retailers today—and for a good reason! It allows them to track dynamic changes in their competitive landscape and respond accordingly instead of relying on static figures like cost or margin. Additionally, it provides valuable insights into consumer demand patterns which helps retailers create more effective pricing strategies over time. In short, if you want your business to stay ahead of the competition regarding price setting, then using CPI is worth considering.

Intrics provides insights and clarity by analyzing over 100 million price changes weekly from top retailers in every market of the United States. By considering national brands and private-label alike and linking disparate SKUs and descriptions to a single UPC, Intrics provides product-level indexes in your market. This allows you to be the first to react by quickly understanding changes to product prices, whether your competitors are absorbing or forwarding increased costs to consumers, and how your prices and price changes compare to theirs.

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