Finding the gaps in your price ladder, and where demand sits
The short answer
Map every product in a category onto your price ladder, then plot units sold and revenue at each price step. Gaps show up as steps with few or no products, and concentrated demand shows up as one or two steps carrying most of the units. Check which customers buy at each step before adding or cutting options.
Why it matters
A ladder with a missing middle pushes shoppers to trade down to an entry price or leave without buying. Crowded steps split the same demand across too many SKUs, which means more stock, thinner sell through and more markdowns at season end.
The question to ask
Copy this into Lexi as written.
What the answer looks like
Illustrative output on sample data
Illustrative example: how Lexi answers this for an outdoor retailer. It bands one season of rain jacket sales by price step and counts styles and units in each.
- $79 to $99: 6 styles, 4,100 units
- $100 to $149: 1 style, 900 units, sold out by week six
- $150 to $199: 7 styles, 2,300 units
- $200 and up: 4 styles, 600 units
What the data shows
Demand concentrates at the entry step. The $100 to $149 step is nearly empty, while seven styles crowd the $150 to $199 band at about 330 units each.
What it means
1,200 entry buyers came back for a second jacket within a year, and 40% of them spent over $150. Customers are ready to trade up, and the ladder has no step for them.
What to do
Add a mid-tier style between $100 and $149 and cut two or three of the crowded $150 to $199 styles.
Want me to show which customers traded up and what they bought?
Frequently asked questions
What is a price ladder in retail?
A price ladder is the set of price points a category offers, from entry to premium, and how many products sit at each one. A good ladder gives shoppers a clear step up at each level. The term overlaps with price architecture, which also covers how prices relate across categories and brands.
Why can adding more price points hurt sales?
Too many options at similar prices make choosing harder and split demand across more SKUs. Each style then sells fewer units, needs its own size run and is more likely to finish the season on markdown. A new price point helps only where a real gap sits between steps customers already buy.
How wide should the gap between price steps be?
Wide enough that each step offers a visible difference in features or quality, and narrow enough that shoppers see the next step as a small stretch. Your own data sets the spacing. Look at how far customers trade up on their second purchase and space the steps to match.