With more than 2,000 stores in 60 countries, one of the world’s largest sports retailers has relied on us to help address the stagnating or declining margins experienced by many retailers following the pandemic.
For our client in particular, market conditions were tightening, with low consumer confidence. It was difficult to maintain the right balance between staying attractively priced and addressing rising costs. This led to falling volume and overstock issues, as well as a reliance on promotional activity, which had the potential to damage brand perception.
Profitability rose by more than €21m from our price recommendations with no decline in volume from a single campaign.
Our client achieved a 3.5% uplift in margin over 3 years from optimising their pricing and discount strategy.
Over 300 millions transactions and 100,000 references were analysed. Around 74% of price recommendations were adopted, showing that business leaders were confident in the approach.
Understanding what your customers value and how much they’re willing to pay is key to turning that value into revenue. When price and value are aligned, businesses don’t just improve profits—they build stronger customer relationships.
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Optimising price structure and discount strategy to generate +3.5% margin uplift
Annualised confirmed profitability gain, payoff for the project is less than one month
We crafted market research studies for both summer and winter product lines, utilising a panel of participants. We analysed the findings, by creating customer profiles, examining purchasing habits , gauging price sensitivity and establishing our clients competitive positioning.
Key Value Items (KVIs) Selection Criteria
The product line selection step determines the initial product segmentation for the purposes of price optimisation.
We created a flexible data pipeline and developed a pricing database. With an advanced Tableau-powered dashboards to visually represent essential insights related to profit, revenue, cost, and market trends, incorporating both transactional and market survey data.
In order to achieve complete acceptance and implementation of the new pricing structures, we integrated various elements, including data engineering, data science and comprising elasticity analysis.
Product segmentation, basket analysis, advanced analytics , market insights obtained through market research, and our extensive commercial expertise, into our approach.
Within a 5 week turn around we were able to recommend new price changes for the entire product line.
Using a semi-automated pricing optimisation system that depends on profitability and demand analysis, along with thorough research, market segmentation, and competitive positioning, we create finely-tuned pricing strategies that align with our clients’ business limitations.
Our pricing optimiser determines the best prices by considering the customers’ willingness to pay, as indicated by price elasticity, and the gross variable margin, all while adhering to established rules and constraints.
An analysis of elasticity by product type is regularly updated to reflect business constraints. This helps us identify areas where price increases can be implemented while safeguarding the performance of our online portfolio from substantial increases.
We developed a solution that improves overall financial performance and facilitates agile and prompt business decision-making. This is achieved by continuously monitoring brand performance and providing detailed insights into pricing and margins.
The implementation of the new pricing and monitoring procedures brought about operational adjustments aimed at optimizing current capacity and efficiency levels.
Additionally , we created training materials and user guides to equip the organization with the necessary pricing knowledge.
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