Why is average unit retail (AUR) important?

Every business currently trading should have a good idea of how they’re doing as far as sales go.

They should also be keeping a watchful eye on their inventory. Is there enough stock to satisfy customer demand? And if not, how can this be fixed?

Average unit retail (AUR) helps businesses know where to focus their sales efforts, whether they’re operating from a brick-and-mortar location or across the vastness of the digital shelf.

In this article, we explain exactly what AUR is, why it’s so important, and how you can use it to help improve your business’s sales.

What is average unit retail (AUR)?

Average unit retail (AUR) means what average price an item – or set of items – has sold at over a specific time period.

Retailers looking to win at the digital shelf will often compare how well one of their products has sold against another, so they know which items customers are gravitating towards based on certain criteria.

A product’s AUR can tell you:

  • Who’s buying it
  • At what price
  • Whether demand has increased (or decreased)
  • If prices were changed recently

Measuring average unit retail (AUR)

You can calculate AUR with the below equation:

AUR = net sales of a product / units sold of that same product

Remember that this calculation will only work if you use data from the same time period; any other figures will give an incorrect final average.

5 tips to fully utilise average unit retail (AUR)

Average unit retail (AUR) is important to brands for many reasons, but mainly because it helps them:

1) Understand customer shopping behaviour better

AUR should help show you which products in your inventory are performing better among customers. Shoppers are often very specific about what they buy, so these insights will be crucial to growing your brand.

Look for any recurring patterns in relation to your products and the people who buy them, namely things like time of year, special events, discounts, etc. These factors all contribute to AUR and must be taken into account if you want to make the most of every possible sales opportunity.

2) Keep their inventory levels under control

Only by rigorously checking your AUR can you begin to understand exactly what stock you need and when you need it. 

Too much and you run the risk of surplus product and loss of profits; too little and it could harm your business’s reputation – trust us, you don’t want to be faced with angry customers who can’t get the goods they’ve paid for!

3) Devise more effective pricing strategies

Retail pricing strategies are a case of trial and error for most businesses. Luckily, AUR can help make it clearer which approaches you should take when pricing your products.

Whether you opt for everyday low pricing, a high-low pricing strategy or something else entirely different, just make sure you don’t alienate your customers. Otherwise, AUR may drop and you’ll be back to square one!

4) Stay on top of competitors – and market trends

We all want to know how our competitors are doing in relation to us on the digital shelf, and AUR provides a great benchmark against which we can measure ourselves.

Use your AUR to inform not only how you respond to the competition but also certain circumstances that may affect your stock levels (weather, strikes, material shortages, etc.).

5) Align their marketing plans

Now that you know what your AUR is, you can begin to align your existing marketing plans with the insights it has provided.

Try not to overhaul every strategy completely; customers hate it when brands surprise them with drastic changes! Instead, try implementing localised changes and measuring the effects over a given period of time. If successful, you can begin to roll out the same changes across your wider business.

Make the most of average unit retail (AUR) with Magpie DBX

Magpie’s Stock and Delivery monitor is all you need to get started with managing your AUR; it will help you assess your sales performance from start to finish, identifying which products are giving you the most return on your investment.

Not only that, our price tracker has been specially designed to keep an eye on your target market, so you always know how well you’re priced in relation to your competitors.

Feel like Magpie DBX could help make your AUR a lot clearer? Get in touch today to request a free demo!

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