Updating prices based on experiment results in Smart Pricing

Two days after an experiment has concluded, you can access the summary of the experiment from the Results page. This page contains all of the information about the results of the experiment, including overall profit and revenue data from products included in the experiment. When there's an overall profit increase or no significant change to profit levels, you have the option to implement your test prices permanently using a CSV file.

Interpreting the results of a pricing experiment

When a pricing experiment has concluded, you receive a page of results that outlines the results of the experiment. Your experiment results include the following sections:

• Experiment results summary
• Experiment analytics and metrics
• Performance table of individual test prices

Summary of experiment results

The summary of the experiment results displays at the top of the experiment's Results page. There are 3 possible summaries, depending on the results of the experiment:

• Profit increase, where the result of the pricing experiment resulted in an overall increase in store profit.
• Minimal change, where the result of the pricing experiment resulted in no significant increase or decrease in store profit.
• Profit decrease, where the result of the pricing experiment resulted in an overall decrease in store profit.

You can opt to update your prices to use the test prices using a CSV file when the profit increases or when minimal change occurs. If there's minimal change to your store profit, then you might want to consider whether other costs associated with your business's pricing, such as a marketing or merchandising budget, make implementing the pricing changes worthwhile.

Analytics supporting experiment results

In the experiment's Results page, you can review the sales data captured during the experiment.

The gross change data is represented by grouped bar graphs comparing the original prices and test prices. The difference in percentage, including the indication of an increase or decrease, displays as well. Additionally, an Inconclusive or Conclusive indicator displays based on whether or not the results achieved statistical significance at 95% confidence.

List of performance results by product

In the Test prices performance section, the list of products that were included in the pricing experiment is displayed along with the specific sales and profit data from the experiment. Each product displays the following data:

Cross-price elasticity

When creating a pricing experiment, all products included in the experiment have their prices tested and optimized as a set. This might include increasing the prices for some products and decreasing the prices for other products. If the results of the experiment indicate an increase in overall store profit, then you can choose to implement the price tips permanently using a CSV file, which includes both the price increases and decreases. Accepting both types of tips as part of the experiment is important, as overall store profit is determined by the balance of price increases and decreases and how that relates to customer demand. This concept is referred to as the cross-price elasticity of demand.

For example, if you sell phone cases and phone accessories, then you might notice a relationship between the sales of products in your store. When you raise the price of a particular brand of phone case, then you might discover how that 1 change can impact sales across your store's other products, for example:

• You might notice a drop in sales for that brand of phone case and an increase in sales of another less expensive brand of phone case in your store.
• You might notice no change to the sales for that brand of phone case, but you notice a drop in sales for other products in your store, such as phone chargers or phone grips.

This relationship between your products is the cross-price elasticity of demand.

Changing all experimental product prices at one time using the provided CSV maintains the cross-price elasticity factor between all of the product prices in your store, and means the store profit results are more consistent with the results from the experiment.

Update your prices to the new experiment prices

If you decide to update your products' prices based on the results of the pricing experiment, then you can download a CSV file from the experiment's Results page. You can then update your products using that CSV file to change the product prices in bulk. Learn more about importing products using a CSV file.

Steps:

1. From your Shopify admin, go to Apps > Shopify Smart Pricing.

2. Click the completed experiment with prices that you want to implement.

3. Click Export test prices.

4. Update your product prices in bulk using the exported CSV file. Learn more about importing products using a CSV file.

Keep the original prices after the experiment

If you decide you don't want to update your products' prices based on the results of the pricing experiment, then you don't need to take any action, as the Smart Pricing app defaults to using the original product price automatically. The only way to change your products' prices is for you to implement the price updates yourself using a CSV file.