So, you’ve finally decided that you need to run some pricing analytics before deciding how to respond to tariffs? Here are two good news for you: (1) you need a lot less data than you think, and (2) you already have that data in your systems!
As a matter of fact, all you really need is a single table, with 6 columns in it. That table comes straight out of your POS system, or your Shopify/WooCommerce/Amazon Seller Central console if you sell online. It’s the table that contains all your orders, at the order line level. The six columns that you need are:
- Order ID
- Date
- Customer ID
- Product ID
- Quantity
- Amount Paid
- …That’s it!
Here are, in a nutshell, all the analytics you can run with that one table and those six columns:
- Price and promotions elasticity, down to the item level
- Price and promotions effectiveness, for each price increase and each promotional campaign
- Pretty much any type of cohort analysis that you want, so you can measure your performance in terms of customer acquisition and customer retention
- Customer deciles and rudimentary customer segmentation
- Product deciles and product performance (trial and repeat rates)
- Market basket analysis, to help you optimize your recommendation engine and design your bundles
- Customer lifetime value and its main drivers (frequency, product breadth and repeat purchases)
- Ordering patterns, to help you decide when and what to charge for shipping/delivery and to help you structure your loyalty tiers
There is even a third good news: you probably already have a lot more data than just these six columns, which will only make your analytics richer and deeper. For instance, Shopify orders data has several additional columns on discounts which can help you take a deeper look into your offers.
So please, don’t wait for the perfect “stack” or for your data lake to be completed. Just pull your orders data, load it into Tableau and start analyzing.
And if you need help, call me or email me and let’s talk about it!
