Industry

Consumer & Retail
Retail

Company Profile

  • $1bn annual revenue
  • Multichannel retailer in consumer electronics, combining hypermarket stores with an online shop
  • 20,000 SKUs in a wide range of categories

Situation and Objectives

  • Develop a new pricing strategy that improves the gross margin without loosing market share
  • Align pricing of online shop with prices in brick-and-mortar stores
  • Define new processes and tools to implement the new pricing strategy

Approach

  • Analyze current pricing strategy in detail to understand its strengths and weaknesses
  • Clarify the objectives as well as the organizational and technical limitations of the new pricing strategy
  • Design new pricing strategy by defining pricing roles and related pricing methods on a store, category and item level
  • Apply new pricing strategy to a selection of pilot categories and define new prices for all of their items
  • Test the new pricing strategy in a selection of stores representative for the whole country
  • Fine-tune pricing strategy and plan roll-out to all stores, including implementation of the pricing tool and training of key stakeholders

Multi-channel Pricing Strategy to Improve Profit

Results

  • New pricing strategy with pricing roles and related pricing methods on a store, category and item level, which in a test showed a positive impact on the gross margin without loosing revenue
  • New prices for a selection of representative pilot categories
  • Roll-out plan for the new pricing strategy in all categories, incl. implementation of new pricing tool
  • Trained key stakeholders who know how to apply the pricing tool and the new pricing strategy

Impact

  • Gross profit increase of 7%
  • Market share development in line with expectations
  • Shift in mindset that not all prices of exclusively online competitors have to be matched