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The Exam Question
A pure play online digital department store retailer wanted to become more sophisticated with its use of price. It wanted to become less reactionary and more proactive and informed in its use of this key element of the marketing mix. In the longer term, it wanted to embark on a journey to become as sophisticated as Amazon in its use of price.
What We Did
TPC were engaged by the client to deliver measurable benefits in achieved margin, without impacting sales or volume growth. This involved looking at many aspects of pricing and promotions. TPC spent time analysing the business which helped to prioritise improvements based on their tactical and strategic impact.
We worked with the business to test hypotheses and embed improvements in the business both in terms of specific changes in price, price presentation as well as by providing for example promotional models backed up by data science, enabling the client to optimise its promotions.
TPC can’t reveal all of what it has done in this case study but it has worked with the client in many areas to deliver benefits that have been measured in the multiple millions. A project ROI in the first year of 6 times was achieved with that number doubling in the second year largely due to the sustainability of the first year’s efforts.
How Does It Apply to Other Companies?
Many retailers fail to make the best use of price as a tool to support their value proposition. Products are often promoted in blunt ways resulting in margin and sales being given away.
Often price is presented on line and in store in a way that is not supportive of the client’s customer proposition and the range architecture isn’t optimised. In many cases a holistic view of price, delivery, service and so forth is not taken.
TPC can help retailers make better use of their single biggest performance lever, price and achieve immediate and long term gains. Not only driving KPIs such as sales and margin but acquiring new customers and keeping existing ones.
Why Thought Provoking Consulting?
TPC believes in helping our customers gain pricing expertise so that they can sustain the benefits and continue to improve. We do this by providing small, expert, dedicated teams who work closely alongside the client’s staff.
We believe we have some of the world’s leading experts in the field of pricing and have a proven track record of delivering measurable benefits.