Pick your biggest category and split it into three price tiers: opening, mid, and premium. Which tier is actually earning its space on the shelf? Most retailers have never looked, and when they do, the answer usually surprises them.
You stock good, better, and best for sound reasons. But the share each tier pulls — and whether that's the share you actually want — almost never gets examined. The category total rolls them all together and hides the story underneath.
The blended category number hides the tiers
"Homewares up 3% year-on-year" tells you nothing about where in homewares the money is. Your opening price points could be booming while premium quietly dies. Or premium could be carrying the category while the cheap end stagnates. The shelf looks the same either way. The economics underneath have shifted, and the blended line keeps it invisible.
What reading the tiers tells you
Splitting one category by price band surfaces four things you can act on:
- Whether your opening tier is cannibalising your mid. You added a cheap line "to have something affordable", and it's quietly eaten the mid tier that was your bread and butter — same units sold, lower margin.
- Whether premium is dead weight. It's sitting there for credibility, tying up cash and shelf space, and barely selling. That might be a demand problem or just a visibility one — but you won't know until you look.
- Whether there's a hole above your mid tier. Customers are buying the top of your mid range because you don't offer the next step up. That's money walking out the door to whoever does.
- How price-sensitive the category really is. When you nudged the mid tier up 5%, did it hold, or did buyers slide down to the opening tier? The tiers answer that; the category total can't.
How to read them (low-tech)
You don't need a new system. Pull twelve months of sales for one category and do three things:
- Define three price bands within the category and tag each product into one.
- Calculate each band's share of category units and of category revenue, this year against last.
- Read the direction. A tier losing unit share while holding revenue share means price rises are masking a volume loss. A tier gaining unit share while losing revenue share means customers are trading down inside the category.
The range decisions fall out of it
Each pattern points to a decision. Opening cannibalising mid: reposition or cull the opening line. Premium dead: cut it, or merchandise it properly before you give up on it. A hole above mid: test a higher tier and watch the response. These are range and pricing calls made on tier data rather than gut feel or a category average that flattens everything.
One thing to do this week
Take your biggest category, split the last twelve months into three price bands, and chart each band's share of units. If one band is quietly taking share from another, that's a range decision waiting to be made — and it's completely invisible in your category total.
If you'd like your ranges read this way — tier productivity, cannibalisation, and the gaps worth filling — our Growth Analytics service is built for exactly that. Or start with the free Retail Health Scorecard to find where your range is leaking margin.