Navigating 7 Common Pricing Pitfalls

With 30,000 new products launched each year and nearly 1 million stores across the US, competition for consumer attention—and dollars—has never been fiercer. In a saturated market, standing out means more than just great products. It demands a pricing strategy that is dynamic and aligns with consumers’ expectations.

The right pricing strategy will be the differentiator between retail leaders and laggards. This guide reveals the most common pricing pitfalls brands and retailers face and outlines how to transform them into a pricing strategy that grows margins and market share instead. Dive in to learn:

•  7 common retail pricing challenges
• Tips to transform pricing into a strategic edge
• How to scale with flexibility and reactivity

Plus, discover market-leading examples of Centric Software® customers leveraging AI-driven solutions for price management success.

• Introduction
•  7 common retail pricing pitfalls to avoid and how to fix them
• Introducing end-to-end Price Management
• Grow margin and market share
• About Centric Software

There is no question that the retail industry is crowded and competitive. Consider these stats:

• Nearly 30,000 new products are introduced each year style [1]
• There are around 1 million retail stores in the US [2]

Given today’s climate of economic uncertainty, consumers are scrutinizing every dollar. With the lingering impacts of inflation, pandemic-induced supply chain hiccups and tariff tensions, consumers are hanging onto their wallets tighter than ever before as they are chasing more value for their hard-earned dollars.

Put simply, brand loyalty is fragile—consumers are not afraid to hop from brand to brand to chase the right price … and there are plenty of options for them to consider.

So, how can retailers and brands stand out in an overcrowded market while still building brand loyalty and growth at scale?

The answer is through smarter price management. Finding the right pricing sweet spot—the point that maximizes profit while meeting customer expectations—is a balancing act. It requires strategic insight, agility and the ability to overcome key challenges that often hinder growth.

This guide outlines the 7 most common pricing pitfalls retailers face and explains how to transform each one into a strategic opportunity that boosts margins and grows market share instead.

1. Manual and fragmented processes. Many retailers and brands start with spreadsheets and basic tools that seem efficient initially, but as complexity grows, so do the pain points. Many tools in the market offer pricing solutions; however, those fragmented systems typically result in siloed data, duplicated efforts and disconnected teams, processes and workflows.

The Result? No single source of truth, making collaboration between business functions nearly impossible where teams end up working in pricing silos. Teams face increased risk of errors in price calculations, flawed promotion strategies and reduced operational efficiency.

Tip: Look for a solution that offers a complete end-to-end pricing workflow—from initial price setting through in-season pricing, promotions and markdowns—all within one seamless process with unified data across all systems and channels. Leverage a highly scalable platform that uses AI to set up the prices correctly. Once the pricing strategy is streamlined and many tasks are automated, teams are freed up to focus on value-added tasks like changing business rules. By adapting the historical data to current shifts in sales to predict and consider future events, building what-if scenarios allows for better decisions. This eliminates the manual processes and accelerates a competitive advantage in a scalable way.

2. Inability to support global and local strategies. For global companies that have massive product portfolios worldwide, offering consumers localized products along with localized pricing is already a headache. Multiple currencies, local tax structures and tariffs make pricing even more complex.

The Result? Inconsistent pricing, compliance issues and operational bottlenecks.

Tip: Leverage a centralized interface for price definition and collaboration that governs pricing rules globally while enabling local flexibility—supporting transparency and consistency across markets.

3. No room for innovation. Without a consistent, transparent and collaborative end-to-end price management strategy, brands and retailers cannot support emerging models like secondhand sales or dynamic discounting.
For example, as second-hand apparel/footwear/accessories continue to trend, especially among sustainably conscious consumers, many businesses are finding growth through the launch of selling second-hand or pre-owned items. However, finding similar items to compare competitive prices is difficult for used items.

The Result? Missed opportunities in fast-growing markets. With the rise of online shopping in a post-pandemic world, consumers are in the habit of comparing prices online before purchasing on a website or heading into a store.

Tip: Select a solution that accurately matches similar or exact products to keep new or even resale price points competitive.

4. Balancing competitiveness and profitability. While heavy or aggressive discounting strategies may clear excess inventory, it does not guarantee long-term or maximized profitability. To drive sustained revenue, retailers need visibility into how the market perceives their pricing.

The Result? Eroded margins, undervalued products, devaluation of brand and a race to the bottom on price—with no sustainable strategy for growth.

Tip: Embed competitive pricing into workflows by aligning competitive data with product ranges and price architecture. Seek a connected solution that integrates PLM, assortment strategy, inventory and competitive insights to enable real-time pricing decisions that protect both positioning and profitability.

5. Supply chain disruptions undermine pricing plans. After experiencing the empty shelves and bottlenecks of products during a global pandemic, consumers are more aware of supply chain disruptions and more likely to switch brands for value.

The Result? Lost loyalty when pricing strategies fail to adjust quickly to supply challenges.

Tip: Connecting assortment and inventory planning with pricing strategies is key to maintaining agility. Offering alternative products at the right price, for example, can help maintain confidence and loyalty from consumers.

6. Inflation and tariff woes. When costs rise, brands and retailers face tough decisions: absorb the costs, pass them to suppliers or the consumer?

The Result? Reduced margins and decreased consumer trust.

Tip: Leverage external market data like consumer trends, competitor activity and economic indicators to inform and make actionable pricing decisions.

7. Poor pricing leads to poor brand experience. Price management is not just about the price tag. It is about brand perception—when prices are inconsistent or misaligned with value, it damages trust and can erode brand equity.

The Result? Shoppers lose confidence, a decrease in loyalty and missed growth opportunities due to poor perception—not just poor pricing.

Tip: Strengthen your pricing strategy by partnering with experts who bring deep industry knowledge and proven best practices. A proactive, insight-driven approach ensures pricing supports both consumer trust and long-term profitability.

Price Management from Centric Software is a complete, end-to-end pricing workflow from initial price setting through in-season pricing, including intelligent promotions—all within one seamless process.

Manage pricing workflows across the organization with a centralized interface to define rules, streamline collaboration and execute consistent pricing across markets and product groups.

A well-known outdoor retailer with hundreds of stores around the world, and whose product assortment consists almost entirely of its own private-label brands, had several problems it needed to solve:

•  Set the initial price range at a level that aligns with consumer expectations
• Grow its range of premium products
• Build a relevant offer on both the local and global levels

The company also needed to standardize the pricing processes and capabilities that were not harmonized and therefore prevented the outdoor retailer from being effective at deploying new business models, like reselling second-hand sports gear, for example. How was it able to achieve these goals?

First, by defining the foundational strategy:

• How to price against competitors
• How to take into account the different exchange rates
• How to manage tariffs

Pre-Season

• Set up initial prices
• Benchmark prices with competitors
• Adapt brand positioning

In-season (lifecycle pricing):

• Price optimization
• Promotional strategies

Benefits

• Enable price elasticity across a complex omnichannel model
• Price consistency between local and global
• Faster and smarter decision making

Similarly, Josef-Bernd Oswald, Product and Merchandise Manager at Leder & Schuh Group, explains how the Austrian footwear company is boosting its margins with AI-powered Centric Pricing & Inventory™:

“We have reduced our price reductions by about 2.5%. That translates into a 1% margin increase, which, on a 300 million-euro turnover, is a 3 million-euro increase to our bottom line. That’s quite a lot; more than we were expecting at the beginning of the project.”

[1] MIT Professional Education, “Why 95% of new products miss the mark (and how yours can avoid the same fate)”

[2] Rasha Mahmoud, “Number of Retail Stores in The U.S.”, Retail Dogma

Centric Software® (centricsoftware.com)

From its headquarters in Silicon Valley, Centric Software provides an innovative and AI-enabled product concept-to-commercialization platform for retailers, brands and manufacturers of all sizes. As experts in fashion, luxury, footwear, outdoor, home, food & beverage, cosmetics & personal care as well as multi-category retail, Centric Software delivers best-of-breed solutions to plan, design, develop, source, comply, buy, make, price, allocate, market, sell and replenish products.

• Centric PLM™, the leading PLM solution for fashion, outdoor, footwear and private label, optimizes product execution from ideation to development, sourcing and manufacture, realizing up to 50% improvement in productivity and a 60% decrease in time to market.
• Centric Planning™ is an innovative, cloud-native, AI solution delivering end-to-end planning capabilities to maximize retail and wholesale business performance, including SKU optimization, resulting in an up to 110% increase in margins.
• Centric Pricing & Inventory™ leverages AI to drive margins and boost revenues by up to 18% via price and inventory optimization from pre-season to in-season to season completion.
• Centric Market Intelligence™ is an AI-driven platform delivering insights into consumer trends, competitor offers and pricing to boost competitivity and get closer to the consumer, with an up to 12% increase in average initial price point.
• Centric Visual Boards™ pivot actionable data in a visual-first orientation to ensure robust, consumer-right assortments and product offers, dramatically decreasing assortment development cycle time.
• Centric PXM™, AI-powered product experience management (PXM) encompasses PIM, DAM, content syndication and digital shelf analytics (DSA) to optimize the product commercialization lifecycle resulting in a transformed brand experience. Increase sales channels, boost sell through and drive margins.

Centric Software’s market-driven solutions have the highest user adoption rate, customer satisfaction rate and fastest time to value in the industry. Centric Software has received multiple industry awards and recognition, appearing regularly in world-leading analyst reports and research.

Centric Software is a subsidiary of Dassault Systèmes (Euronext Paris: #13065, DSY.PA), the world leader in 3D design software, 3D digital mock-up and PLM solutions.

Centric Software is a registered trademark of Centric Software, Inc. in the US and other countries. Centric PLM, Centric Planning, Centric Pricing & Inventory, Centric Market Intelligence, Centric Visual Boards and Centric PXM are trademarks of Centric Software, Inc. All third-party trademarks are trademarks of their respective owners.