Embed Size (px)
Citation preview
Confidential ©2014 Revionics, Inc.
The Price is Right, Right?Florian Strecker, Director Sales Revionics
Confidential ©2014 Revionics, Inc.
• Founded 2002, HQ in Austin (TX), Offices in Melbourne, London & Düsseldorf
• SaaS Delivery Model in the Cloud
• Enable retailers to compete more profitably through smarter daily pricing, promotions & markdowns:
– Strategies & tactics– Price management – Optimisation leveraging predictive analytics
• 70+ customers worldwide optimizing $150B in revenue for over 37,000 sites (grocery, drugstores, general merchandise, DIY, consumer electronics, fashion, pet food, online)
• Strong partner network
2
About Revionics
Confidential ©2014 Revionics, Inc. 3
Basket impact on other items in my assortment
Competitor prices, strategies & price change frequency,market share & price indices
Data proliferationdue to increasingchannels & touch points
Rules & relationships that must be maintained
Decision on whetherto pass on, absorb orphase in cost changes
Shopper response to changes in price varies bychannel, product & category
Demand impacts of seasonality, holidays &weather
Implications for individual stores or zones
Pricing Right is Complex
vs
Confidential ©2014 Revionics, Inc. 4
Pricing has the Biggest Impact on ProfitProfit = Price * Units Sold - Cost
Price is the most important Profit DriverMcKinsey Studie, Marn et al.: The Price Advantage
Typical operating profit improvements from different levers
PWC: The Power of Pricing
Bad pricing lowers profit by 25%Simon Kucher & Partner, Global Pricing Study 2011
AMR Research
Confidential ©2014 Revionics, Inc. 5
Life Cycle PricingShape Shopper Demand across Channels & Stores
Confidential ©2014 Revionics, Inc.
Exploit Variation in Shopper Price Sensitivity & Competitive
EnvironmentsUnit Sales
T i m e
Product IntroductionClearance
Base Pricing Defines Image
Promotions Incentivize Desired Behavior
Markdowns Move Rapidly & Profitably
Confidential ©2014 Revionics, Inc. 6
Optimisation & Management
“Right” Pricing Across the Life Cycle
Confidential ©2014 Revionics, Inc.
Internal & External Data
T-Log & POS Data
Competitive Environment
Vendor Data
Inventory, On Order &
Allocation
Competitor & Market
Data
Shopper Segments
Demographic & Geographic
Data
Better Pricing Decisions
Shopper-centric Localized Pricing &
Competitive Positions
Optimal Offers, Promotional
Vehicles & Media Types
Inventory-aware, Localized Markdown Start-Date, Cadence
& Discount
Confidential ©2014 Revionics, Inc. 7
Understanding Price Elasticity
Confidential ©2014 Revionics, Inc.
Demand Distribution
Price Elasticity
Am
ou
nt
Sold
0 1 2 3
Price Elasticity 0,75Low Elasticity
Low Price Sensibility
Candidate for Price Increase(Margin Enhancer)
Price Elasticity 2-3High Elasticity
Strong Price Sensibility
Candidate for Price Reduction
(Competitive Strategy)
Confidential ©2014 Revionics, Inc.
Understanding UpLift
8
$- $1.00 $2.00 $3.00 $4.00 0
500
1000
1500
2000
E
PricePromo
Price
Uni
t Sal
es
Uplift
Confidential ©2014 Revionics, Inc.
Deep Insight into Shoppers & Competitors
What are my real KVIs? What role does each product play within the
category? Where should I be competitive & where can I
gain margin? Which products should be promoted? How should I cluster my stores for more
operational efficiency? What product affinities exist? Who is my most important competitor?
9
Optimal Decisions
T-Log & POS Data
Competitive Environment
Vendor Data
Inventory, On Order &
Allocation
Competitor & Market
Data
Shopper SegmentsDemographic
& GeographicData
Confidential ©2014 Revionics, Inc. 10
Combine Science & Rules & Strategies
Confidential ©2014 Revionics, Inc.
Rules / Constrain
ts
Strategies / Objectives
Science / Analytics
• Price Change Frequency• Minimum/Maximum Price Change• Ending Number Rules• Margin Targets• Competitive Index• No Touch Periods• Vendor Deals• ...
• Margin Enhancer• Traffic Driver• Competitive KVI• Basket Builder• ...
• Price Elasticity• Promotional/Markdown Lift• Seasonality• Cannibalisation• Affinity• ...
• Maximize Profit• Maximize Sell-Through• Target Exit-Date• Target Inventory Position• ...
Confidential ©2014 Revionics, Inc. 11
• End-to-End Consulting• Solutions Implementation• Project Management• Change Management• Training • Support
A Partner in RussiaRevionics and SmartService are partners in the fields of:
Confidential ©2014 Revionics, Inc.
Confidential ©2014 Revionics, Inc.
Questions & Answers
