Concept Store: Pricing Strategy

This article was written by our expert who is surveying the industry and constantly updating the business plan for a concept store.

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The Dojo Business Team

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We're a team of finance experts, consultants, market analysts, and specialized writers dedicated to helping new entrepreneurs launch their businesses. We help you avoid costly mistakes by providing detailed business plans, accurate market studies, and reliable financial forecasts to maximize your chances of success from day one—especially in the concept store market.

What are the typical price ranges for products in concept stores right now?

Concept stores in 2025 operate across three distinct price tiers that together create a balanced assortment designed to attract diverse customer segments while maintaining strong margins.

Entry-level products typically range from $15 to $30 USD and represent the gateway offerings that drive foot traffic and encourage first-time purchases. These items include accessories, small home goods, stationery, and basic lifestyle products that introduce customers to your store's curated aesthetic without requiring significant financial commitment.

Mid-range products priced between $40 and $90 USD form the core of most concept store offerings, accounting for 40-50% of the typical product mix. This tier includes apparel, quality home accessories, beauty products, and distinctive gifts that capture meaningful margins while remaining accessible to your target demographic. These products establish your store's curatorial voice and differentiate you from mass-market retailers.

Premium offerings exceed $150-$200 USD and serve as statement pieces that reinforce your concept store's positioning as a destination for exclusive, limited-edition, or designer items. While representing only 10-20% of inventory, these products significantly elevate brand perception and attract high-value customers seeking unique finds they can't access elsewhere.

Location dramatically influences these price points—prime downtown retail space in urban Asian markets like Bangkok or Singapore commands rents of 5,500-6,500 THB per square meter monthly, compared to 3,000-4,800 THB in suburban areas, directly impacting the pricing structure needed to maintain profitability. Store curation quality, brand partnerships, and the perceived "coolness factor" also justify premium pricing in competitive markets.

You'll find detailed market insights in our concept store business plan, updated every quarter.

How do customer income levels and demographics shape acceptable pricing?

Your concept store's pricing strategy must align precisely with your target customers' income levels, age groups, education backgrounds, and geographic locations to maximize both sales volume and profit margins.

Higher-income, urban, and trend-sensitive customers actively seek premium price ranges because they value uniqueness, craftsmanship, limited editions, and the social currency of discovering exclusive products before they become mainstream. These customers often view your concept store as a curated filter that saves them time and delivers products that align with their lifestyle aspirations—they're willing to pay 30-50% premiums over mass-market alternatives for this service.

Middle and lower-income segments require a different approach focused on accessible entry-level categories that deliver perceived value while maintaining your store's aesthetic standards. These customers are more price-sensitive but will invest in mid-range products when they perceive strong quality-to-price ratios or when items serve as affordable luxuries that elevate their daily lives.

Age significantly influences price acceptance—younger customers (18-30) typically prefer lower price points with frequent rotation and trend-forward designs, while customers aged 30-50 demonstrate higher willingness to invest in quality pieces with longevity. Education level correlates strongly with appreciation for design, craftsmanship, and storytelling, allowing stores serving educated demographics to command premium pricing through effective product narratives.

Geographic location creates distinct pricing zones even within the same city. Urban core customers accept 20-40% higher prices than suburban shoppers for identical products, reflecting differences in disposable income, competitive alternatives, and the experiential value of downtown shopping districts.

Segmenting your product mix and tailoring price communication by core demographic enables you to maximize sales across customer groups—for example, prominently featuring entry-level items in marketing to younger audiences while highlighting premium collections in communications targeting established professionals.

What's the ideal product mix across entry, mid-range, and premium tiers?

The optimal product distribution for concept stores in 2025 follows a pyramid structure that balances traffic generation, margin capture, and brand positioning through strategic tier allocation.

This distribution ensures entry-level options drive consistent traffic and repeat visits while mid-tier products capture the margins necessary for profitability. Premium offerings, though representing a smaller percentage of SKUs, disproportionately impact brand perception and often generate higher absolute profits despite lower turnover.

Adjust these percentages based on your specific location and target demographic—stores in affluent neighborhoods can shift toward 30% entry, 45% mid, 25% premium, while stores serving younger or more price-conscious audiences may need 50% entry, 40% mid, 10% premium to optimize conversion rates.

How does pricing strategy affect brand perception and customer loyalty?

Your concept store's pricing strategy serves as the primary signal of your brand positioning and directly determines whether customers perceive you as a trend authority or just another retailer.

Higher pricing inherently signals exclusivity, curatorial expertise, and quality when properly supported by store experience, product storytelling, and visual merchandising. Customers who pay premium prices expect—and receive—enhanced service, unique product discoveries, and the confidence that they're accessing items not widely available elsewhere. This creates psychological investment that translates into stronger brand loyalty and higher lifetime customer value.

Conversely, inconsistent pricing or frequent heavy discounting rapidly erodes brand equity. When customers learn to wait for sales, they no longer trust your regular pricing and view your store as opportunistic rather than authoritative. Research shows that concept stores practicing aggressive discounting experience 40-60% lower customer retention rates compared to stores maintaining price discipline with targeted, strategic promotions.

The key is creating pricing that customers perceive as fair within your positioning—not necessarily cheap, but justified by the value delivered through curation, experience, and product quality. Customers develop loyalty when they consistently discover products at prices that feel appropriate for the quality and uniqueness received, even if those prices exceed mass-market alternatives.

Price transparency and consistency across channels also build trust. Customers expect your online and in-store prices to align (within reason for channel-specific costs), and they increasingly research prices before visiting. Maintaining this consistency, while reserving special promotions for loyalty program members, creates the perception of insider access that strengthens emotional connection to your brand.

Premium pricing also attracts the right customer base—those who value curation over commodification and are willing to pay for the time savings and discovery experience your store provides. These customers become brand advocates, generating word-of-mouth marketing that no discount-driven strategy can replicate.

What gross margin targets should concept stores aim for across categories?

Concept stores must achieve robust gross margins to offset the higher operating costs inherent in curated retail environments, with targets varying significantly by product category and positioning strategy.

The industry benchmark for concept stores selling curated goods ranges from 35-50% gross margin, with successful operators consistently hitting 40-45% across their blended assortment. This margin level accounts for the premium rent locations, investment in store design and experience, smaller inventory turns compared to mass retail, and the labor costs required for knowledgeable staff who can effectively communicate product stories.

Design-led retail and exclusive collaborations command significantly higher margins—typically 40-80%—because customers perceive these items as unique and cannot easily price-compare with competitors. Private label products, which many mature concept stores develop, achieve margins at the upper end of this range since they eliminate distributor markups and allow complete control over pricing strategy.

Category-specific margin targets break down as follows: Fashion and apparel typically achieve 45-60% margins; home goods and decor run 40-55%; beauty and personal care products range 35-50%; books and stationery operate at 30-40%; and food and beverage items (if carried) deliver 25-35% margins but drive traffic and basket size.

Lower margin categories like basic consumables or established brand-name products still deserve space in your assortment because they drive repeat visits and complement higher-margin purchases—a customer who comes for a $12 candle often leaves with $80 in additional purchases at 50% margin.

The blended margin approach allows concept stores to compete on certain recognizable products while extracting significant margins from exclusive or lesser-known items where price comparison is difficult. Track margins by category weekly and adjust your mix when any category consistently underperforms—maintaining the overall 40-45% blended target is essential for long-term viability in concept retail.

This is one of the strategies explained in our concept store business plan.

How should you factor supplier costs and import expenses into retail pricing?

Building retail prices for your concept store requires systematic calculation of all landed costs to ensure your target margins remain intact after accounting for the full supply chain expense structure.

Start with your supplier's cost of goods sold (COGS), which represents the wholesale price you pay for products. This baseline cost must then be adjusted for several additional expense layers that many new concept store owners underestimate. Import duties vary dramatically by country and product category—Asian markets commonly charge 5-40% duties on imported goods, with luxury items, alcohol, and certain materials facing the highest rates. Thailand, for example, applies import duties ranging from 0-60% depending on product classification, with most concept store goods falling in the 5-30% range.

Value-added tax (VAT) or sales tax adds another 7-20% in most markets—Thailand charges 7% VAT, while many European markets impose 18-25%. These taxes must be collected from customers but affect your price positioning and customer perception of affordability. Factor these into your displayed retail price calculation to avoid margin surprises.

Logistics costs include international shipping (typically 8-15% of COGS for Asian imports), customs brokerage fees (1-3%), domestic transportation (2-5%), and warehousing if you don't ship direct to store (3-7%). For small concept stores ordering in smaller quantities, these percentages often run higher due to lack of volume discounts—plan for 15-25% total logistics burden on imported goods.

Currency fluctuation represents another critical factor often overlooked in pricing models. When importing products with payment in foreign currency, exchange rate movements of 5-10% can quickly eliminate margins. Successful concept stores either build 8-12% currency buffers into initial pricing or establish mechanisms for periodic price adjustments tied to significant currency shifts.

A practical formula for retail pricing: (COGS + Import Duties + Logistics Costs) ÷ (1 - Target Gross Margin %) = Minimum Retail Price. For example, a product with $30 COGS, $6 duties (20%), $5 logistics costs, and a 45% target margin requires a minimum retail price of ($30+$6+$5) ÷ (1-0.45) = $74.55, which you'd likely round to $75 or use psychological pricing at $79.

Review and recost your imported products quarterly because supply chain costs remain volatile. Tariff changes, shipping rate increases, or supplier price adjustments require immediate pricing analysis to protect your margins and profitability.

What role do psychological pricing tactics play in concept stores?

Psychological pricing strategies significantly influence both purchase decisions and basket values in concept store environments, working with human cognitive biases to optimize revenue while maintaining brand positioning.

Charm pricing—ending prices in .99, .95, or .97—remains highly effective even in premium retail contexts. Products priced at $49.99 instead of $50 are perceived as significantly cheaper due to left-digit bias, where customers focus on the first number ($4X versus $5X). Studies show charm pricing increases conversion rates by 8-12% compared to rounded prices, making it valuable for entry and mid-tier products. However, ultra-premium items ($500 versus $499) often perform better with round numbers that signal quality over bargaining.

Anchor pricing establishes reference points that make other products appear more reasonably priced. Placing a $300 designer item near $80-$120 products makes the mid-range options feel more accessible while the expensive piece elevates the perceived category value. This technique works especially well in concept stores where customers expect curated, higher-quality assortments and benefit from anchors that justify your overall price positioning.

Center-stage pricing positions your mid-range products (where you achieve best margins) as the most prominent option, flanked by cheaper and more expensive alternatives. Customers naturally gravitate toward middle options, perceiving them as balanced choices. In concept stores, physically placing these items at eye level, featuring them in window displays, or highlighting them in digital catalogs capitalizes on this bias.

Decoy pricing introduces a strategically overpriced option to make your target product appear more valuable. A $150 ceramic vase seems expensive until positioned next to a $400 version—suddenly the $150 option feels like smart value. This works particularly well for exclusive or designer collaborations where you control the pricing structure.

Bundle pricing offers multiple products at a combined price that appears to discount individual items (Buy this $60 candle, $40 diffuser, and $30 matches together for $110). This increases average transaction value while moving inventory and creating the perception of added value, critical for concept stores competing with online price transparency.

These strategies shape value perception and guide customers toward purchases that optimize both their satisfaction and your profitability—use them deliberately across your pricing architecture.

How frequently should you review and adjust your concept store pricing?

Establishing a disciplined pricing review cadence ensures your concept store remains competitive and profitable while avoiding the trust-eroding effects of erratic price changes.

Quarterly reviews represent the retail industry standard for comprehensive pricing analysis across your full assortment. These reviews should examine gross margins by category, compare your prices against direct competitors, analyze sell-through rates by price tier, and adjust pricing based on actual performance data. Quarterly timing aligns with seasonal inventory planning and provides sufficient data points to identify meaningful trends without overreacting to short-term fluctuations.

Monthly tactical adjustments work best for high-turnover SKUs, trend-driven categories, or products facing direct competitive pressure. Fast-moving items in categories like beauty, consumables, or accessories benefit from more frequent monitoring because market conditions shift rapidly and small price optimizations yield significant revenue impacts. Track your top 20% of SKUs (by revenue) weekly and adjust monthly based on velocity, inventory levels, and competitive intelligence.

Event-driven pricing changes respond to specific market conditions regardless of your review schedule. Supplier cost increases exceeding 10%, significant currency fluctuations affecting import costs, competitor pricing actions that threaten your positioning, or unexpected changes in demand all warrant immediate pricing analysis. However, implement these changes thoughtfully—frequent adjustments damage customer trust and create operational complexity.

Seasonal pricing strategies require planning 8-12 weeks in advance. Mark up seasonal items 15-30% higher at season start, then implement structured markdown schedules (typically 20% off at 6 weeks, 40% off at 4 weeks, 50-70% off final clearance) to optimize sell-through while protecting margins. This discipline prevents the panic discounting that erodes profitability.

Transparent communication about price changes maintains customer trust. When increasing prices on existing items, update digital channels simultaneously with in-store signage. Consider grandfather pricing for loyalty members on favorite items, or provide advance notice of upcoming increases to preserve relationships while protecting margins.

Avoid the trap of constant price tinkering—changes should be deliberate, data-driven, and communicated clearly to your team so everyone understands the strategy and can explain it to customers when questioned.

What promotional and discount strategies protect brand value?

Effective promotional pricing in concept stores requires strategic discipline that drives incremental sales without conditioning customers to wait for discounts or undermining your premium positioning.

• Time-limited flash sales (24-48 hours) create urgency without establishing expected discount patterns. Offering 20-30% off select items for a brief window drives immediate purchases while maintaining regular pricing psychology. Announce these through email or social media to reward engaged customers without broadcasting permanent price reductions.
• Member-exclusive promotions through your loyalty program provide privileged access to savings without cheapening brand perception. Offering loyalty members 15% off during private shopping hours or early access to sales makes them feel valued while protecting public-facing prices that define your market position.
• Bundle discounts increase basket size while appearing generous without direct price cuts. "Complete the look" bundles or curated gift sets at 15-20% below individual item pricing move inventory strategically and introduce customers to products they might not purchase separately.
• Volume incentives for multiples (Buy 2 Get 15% Off, Buy 3 Get 25% Off) work particularly well for consumables, gifts, or replenishment items in concept stores. This approach increases transaction value while the discount feels like a reward for commitment rather than a desperate price reduction.
• Early-bird or founder discounts for new product launches reward your most engaged customers and generate excitement around new arrivals. Offering 20% off pre-orders or first-week purchases drives initial velocity without discounting products throughout their lifecycle.
• Seasonal clearance with clear communication allows necessary inventory liquidation without brand damage. Clearly marking items as "End of Season" or "Making Room for New Collections" helps customers understand the discount context isn't about product quality but about making space for fresh assortments.
• Value-add promotions instead of price reductions maintain price integrity while increasing perceived value. Offer free gift wrapping, complimentary add-ons, or free shipping at certain thresholds rather than cutting prices—customers perceive enhanced value without the price signal degradation.

Never discount broadly or frequently—data shows concept stores that run promotions more than 30% of the year experience permanent brand value erosion and train customers to avoid full-price purchases. Reserve discounting for strategic inventory management, new customer acquisition, or loyalty rewards, not as a crutch for weak product selection or poor initial pricing.

We cover this exact topic in the concept store business plan.

How should online and in-store prices align across channels?

Price consistency across your concept store's physical and digital channels is critical for brand trust and operational efficiency in 2025's omnichannel retail environment.

Base retail prices should align identically online and in-store for the same products to avoid customer confusion and maintain pricing integrity. Customers increasingly research prices on their phones while shopping in-store or check your website before visiting—price discrepancies create distrust and undermine confidence in your brand. When customers discover lower online prices while standing in your store, you lose both the sale and their long-term loyalty.

Channel-specific operational costs do justify tactical differences in promotional structures rather than base pricing. Online operations incur shipping, packaging, and returns costs that physical stores don't face, while stores bear higher rent and staffing expenses. Address these differences through channel-specific promotions: "Free shipping over $100" online or "In-store exclusive: Free gift wrapping" in physical locations.

Digital-only promotions can drive online traffic without impacting store perception—limited-time online discount codes, mobile app exclusives, or email-subscriber offers reward digital engagement. Similarly, in-store events, personal shopping appointments, or local customer appreciation days provide value without requiring online price matching.

Omnichannel capabilities like buy-online-pickup-in-store (BOPIS) or shop-in-store-ship-to-home require identical pricing at the moment of purchase regardless of fulfillment method. Customers view these as unified shopping experiences and expect consistent pricing across all touchpoints in their journey.

Geographic pricing variations sometimes make sense for concept stores with multiple locations in different markets. A store in downtown Singapore with 40% higher occupancy costs than a suburban Bangkok location might need different pricing—but communicate this clearly and maintain consistency within each location's online/offline channels.

Technology solutions now make price synchronization simple—modern POS and e-commerce platforms update prices simultaneously across channels, eliminating the excuse for inconsistency. Implement these systems early to avoid the operational nightmare and customer dissatisfaction that price discrepancies create.

The expectation in 2025 is complete channel integration—customers don't think about "online" versus "offline" anymore, they think about your brand. Meet this expectation through unified pricing supported by channel-appropriate promotional strategies.

What metrics and KPIs validate your pricing strategy effectiveness?

Monitoring the right data points allows you to validate pricing decisions and make evidence-based adjustments that maximize profitability and customer satisfaction in your concept store.

Implement dashboard reporting that tracks these KPIs weekly for critical metrics (ATV, sell-through on new arrivals) and monthly for comprehensive analysis (margin by category, inventory turns). Compare performance month-over-month and year-over-year to identify trends and seasonal patterns that inform pricing decisions.

Competitive benchmarking adds essential context—if your margins are strong but traffic is declining, competitors may be undercutting your prices. Conversely, strong traffic with weak margins suggests your pricing isn't capturing the value customers perceive in your offerings.

How do you integrate customer feedback and sales data into pricing decisions?

Systematic integration of customer feedback and real-time analytics transforms pricing from guesswork into a data-driven process that continuously optimizes profitability and customer satisfaction for your concept store.

Point-of-sale (POS) data provides the foundation—track every transaction by SKU, price point, time of day, payment method, and staff member to identify patterns in purchase behavior. Modern POS systems reveal which products sell together, which price points convert browsers to buyers, and which items sit stagnant despite prominent placement. Review this data weekly to spot emerging trends before they become problems or missed opportunities.

Online analytics complement POS data with insights impossible to capture in physical retail. Track how customers navigate your digital store—which products they view, how long they consider before purchasing, where they abandon carts, and which price points trigger exits. Heat mapping shows which products draw attention, while cart abandonment analysis reveals price thresholds where customers balk. If you notice consistent abandonment at the $75+ level, you've identified a psychological pricing barrier to address.

Customer feedback through surveys, reviews, and direct conversations provides qualitative context that numbers alone miss. Implement post-purchase surveys asking "How did you feel about the pricing?" with options from "Excellent value" to "Too expensive." Track net sentiment scores by product category to identify perception gaps. Reading reviews often reveals whether customers feel prices are justified by quality—phrases like "worth every penny" or "seemed overpriced" guide adjustments.

A/B testing allows empirical validation of pricing hypotheses. Test different price points for similar products, run promotional structures in different channels, or offer tiered pricing to segments of your audience. Track conversion rates, margin capture, and customer feedback for each variant. Even simple tests—like pricing one candle at $32 and another comparable one at $35—provide actionable insights within weeks.

Social media listening captures unsolicited feedback about your pricing relative to competitors. Monitor mentions of your store alongside price-related terms ("expensive," "affordable," "worth it") to gauge market perception. Customer discussions comparing your prices to alternatives reveal positioning opportunities or vulnerabilities requiring response.

Returns data exposes pricing-value mismatches. Products returned with comments about quality not meeting price expectations indicate overpricing or poor product selection. High return rates at specific price points suggest customers have different value expectations than your pricing assumes.

Create a monthly pricing review meeting where you synthesize these data sources into actionable decisions. Bring together POS reports, online analytics, customer feedback summaries, competitive intelligence, and margin analysis. Identify 3-5 pricing actions each month—whether adjusting specific SKU prices, testing new psychological pricing strategies, or refining your product mix allocation by tier. Document decisions and outcomes to build institutional knowledge about what works in your specific market.

It's a key part of what we outline in the concept store business plan.

Conclusion

Successful concept store pricing in 2025 requires disciplined execution across multiple dimensions—from understanding your local market's price points and demographic realities to implementing psychological pricing tactics and maintaining omnichannel consistency. Your pricing strategy is not a one-time decision but a dynamic process that balances accessibility with exclusivity, data analysis with customer intuition, and margin requirements with brand positioning.

The concept stores that thrive in today's competitive environment treat pricing as a strategic advantage. They systematically review performance metrics, integrate customer feedback into decisions, protect brand value through disciplined promotions, and adjust quickly to market changes while maintaining the trust that comes from consistent, fair pricing. By following these evidence-based guidelines—from achieving 40-45% gross margins to maintaining a 35-45% entry-level product mix to conducting quarterly pricing reviews—you position your concept store for sustainable profitability and loyal customer relationships.

This article is for informational purposes only and should not be considered financial advice. Readers are encouraged to consult with a qualified professional before making any investment decisions. We accept no liability for any actions taken based on the information provided.

Sources

1. Krungsri Research - Industry Outlook: Retail Space
2. LinkedIn - Product Assortment in Concept Stores
3. Creative Displays Now - Customer Demographics in Retail
4. Omnia Retail - Psychological Pricing
5. McKinsey - Pricing in Retail: Setting Strategy
6. DHL - What is Import Duty
7. Intelligence Node - Adjust Your Pricing
8. RELEX Solutions - Promotional Pricing
9. Emarsys - Omnichannel Trends in Retail
10. NetSuite - Psychological Pricing Strategies