Client: Electronics retailer
Topic: Price Management
Our client is an electronics retailer with both on- and off-line presence. To be able to adjust prices faster and more frequently, they decided to start using dynamic pricing software for their price setting. The pricing software facilitated the scraping of competitive pricing as well as the price setting process.
Price setting through the software was based on business rules. Our client had a historically grown pricing strategy in place. It was high-level, with a relatively high degree of freedom for the individual category managers to make pricing decisions. It turned out to be difficult to fit the strategy in the pricing software. Going forward, there was a need for more structure, and agreed-upon pricing principles as input for the pricing software.
To improve clients’ pricing strategy, we co-created a uniform pricing framework, with the possibility of category-specific deviations. The pricing framework consisted of elasticity buckets, competitive business rules, and several company-specific parameters. After implementation, price setting was no longer a black box. Individual price changes became explainable, based on pre-defined, and agreed upon business rules. Subsequently, these business rules were automatically applied by the dynamic pricing software.
