Ugam Holiday Analysis: Amazon Won Dynamic Pricing Battle by Wide Margin

Retail Analytics Report Reveals Industry-Wide Pricing and Assortment Trends for 2015 Holiday Shopping Period

NEW YORK – February 9, 2016 – Ugam, a global leader in managed analytics, today announced the release of its report, A Look Back: Amazon’s Pricing and Assortment Trends for the 2015 Holiday Shopping Season. The report examines the results of Ugam’s comprehensive analysis of several leading retailers’ pricing and assortment strategies for toys and electronics from Thanksgiving through Cyber Week 2015. Among several other observations, the report concludes that Amazon was the clear dynamic pricing leader, making over three times more price changes per item than its competitors.

“More and more shopping during the critical holiday period is moving from in-store to online, making e-commerce pricing and assortment strategies more important than ever,” said the report’s author, Sudhir Holla, SVP Retail at Ugam. “This analysis makes clear that this fiercely competitive season was not about who offered the lowest prices, but who was able to effectively adjust prices based on market conditions in order to maximize margins.”

Ugam analyzed the pricing trends by the hour for the top toys and electronics to find out how major U.S. retailers competed on price during this peak shopping period. Its key findings covered:

Amazon’s Dynamic Pricing:

  • Amazon made over three times more price changes per item than the competition, re-pricing some of the popular toys an average of 4.5 times a day, and electronics 3.2 times per day from Thanksgiving until Cyber Monday, overall re-pricing its products eight times more than the closest competition. The retailer did not necessarily always have the lowest prices for popular toys and electronics; in some cases, its pricing was considerably higher than the competition. Meanwhile, Target and Best Buy’s pricing remained largely constant throughout the Thanksgiving weekend.

Industry Pricing Insights:
  • Target increased prices on electronics during Cyber Week by the highest margin (12%).
  • Toys “R” Us was priced higher than other retailers for more than 70% of toys between Thanksgiving and Cyber Monday.
  • Average electronics prices across all retailers were approximately 3% lower on Thanksgiving than the other days of the analysis. But prices for the most popular electronics rose steadily throughout the rest of the week, increasing by as much as 12% for the top trending electronics.
  • Cyber Monday was the best time to buy some of the most popular toys and games during the Thanksgiving to Cyber Week period. Average toy prices then increased by as much as 6% across retailers during the week, with Walmart being the only retailer during Cyber Week that had lower prices than on Cyber Monday.

Industry Assortment Insights:
  • Target and Amazon had the lowest out-of-stock rates, while Walmart saw products going out of stock more frequently than the competition. All the top-trending toys were available for purchase on Amazon from Thanksgiving through Cyber Monday, while 93% of the top-trending electronics were always in-stock and available for purchase on Amazon.
  • While Walmart carried most of the top-trending toys (58 out of 60), only 70% of them were always available for purchase during the entire period of analysis. The retailer carried most of the top-trending electronics (51 out of 60), but only half of those were always in-stock during the period of analysis.

The report concluded that Amazon was most effective in utilizing dynamic pricing techniques, while other retailers used some dynamic pricing while working to balance higher supply chain costs with the need to be competitive in the market. The results also indicate that the use of dynamic pricing will continue to increase as retailers look for new ways to balance traffic, conversion and margins, based on a more data-driven understanding of consumer behavior.

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About Ugam
Ugam is a global leader in managed analytics that helps retailers, brands and market research firms transform big data into valuable insights. The company’s unique managed services offering combines a proprietary big data technology platform with deep domain knowledge and analytics expertise to empower clients to make decisions that improve their business. For retailers, online marketplaces and brands, Ugam supports better merchandising, marketing and channel management decisions through the use of analytics. For market research firms and insight-based consultancies, Ugam offers a portfolio of solutions including end-to-end research operations, technology transitioning support, and data warehousing, visualization and reporting that enables them to better serve their clients. Five of the top 10 U.S. retailers, many of the world’s largest brands and online marketplaces, and 13 of the top 25 market research firms work with Ugam because of its ability to deliver high-quality insights with unmatched customer experience.

For more details, please contact:

Vandita Thomas
Marketing & Communications Lead