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Флориан Штрекер, Revionics: Ценообразование
- 1. Confidential ©2014 Revionics, Inc. The Price is Right, Right? Florian Strecker, Director Sales Revionics
- 2. 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
- 3. Confidential ©2014 Revionics, Inc. Basket impact on other items in my assortment Competitor prices, strategies & price change frequency, market share & price indices Data proliferation due to increasing channels & touch points Rules & relationships that must be maintained Decision on whether to pass on, absorb or phase in cost changes Shopper response to changes in price varies by channel, product & category Demand impacts of seasonality, holidays & weather Implications for individual stores or zones 3 Pricing Right is Complex vs
- 4. Confidential ©2014 Revionics, Inc. 4 Pricing has the Biggest Impact on Profit Profit = Price * Units Sold - Cost Price is the most important Profit Driver McKinsey 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
- 5. Confidential ©2014 Revionics, Inc. 5 Life Cycle Pricing Shape Shopper Demand across Channels & Stores Confidential ©2014 Revionics, Inc. Exploit Variation in Shopper Price Sensitivity & Competitive Environments U n i t S a l e s T i m e Product Introduction Clearance Base Pricing Defines Image Promotions Incentivize Desired Behavior Markdowns Move Rapidly & Profitably
- 6. Confidential ©2014 Revionics, Inc. Optimisation & Management 6 “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
- 7. Confidential ©2014 Revionics, Inc. 7 Understanding Price Elasticity Confidential ©2014 Revionics, Inc. AmountSold Price Elasticity Demand Distribution 0 1 2 3 Price Elasticity 0,75 Low Elasticity Low Price Sensibility Candidate for Price Increase (Margin Enhancer) Price Elasticity 2-3 High Elasticity Strong Price Sensibility Candidate for Price Reduction (Competitive Strategy)
- 8. Confidential ©2014 Revionics, Inc. Understanding UpLift 8 0 500 1000 1500 2000 $- $1.00 $2.00 $3.00 $4.00 UnitSales Price E Price PromoUplift
- 9. 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 & Geographic Data
- 10. Confidential ©2014 Revionics, Inc. 10 Combine Science & Rules & Strategies Confidential ©2014 Revionics, Inc. •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 •...
- 11. Confidential ©2014 Revionics, Inc. • End-to-End Consulting • Solutions Implementation • Project Management • Change Management • Training • Support 11 A Partner in Russia Revionics and SmartService are partners in the fields of: Confidential ©2014 Revionics, Inc.
- 12. Confidential ©2014 Revionics, Inc. Questions & Answers
- 13. Confidential ©2014 Revionics, Inc. Thank you! revionics.com Florian Strecker Florian.Strecker@Revionics.com
Editor's Notes
- And there are so many factors involved in getting the price, promotion and markdown right everything from competitive positioning and price image, to dealing with supplier cost increases, to maintaining relationships between products, to understanding response to price, change varies from different shopper segments, store clusters, and channels Add to that the proliferation of data coming from new sources and you have a lot of inputs to analyze and make inferences from – This increasingly complex environment makes it very difficult for past methods of pricing,– previously done by gut feel and spread sheets – to be relevant or timely. requiring retailers to move from manually intensive or rules-based decision-making to one that embraces science and technology to achieve the speed, scale and frequency demanded to compete today.
- Life cycle price optimization is all about managing pricing across the life of products in a way that exploits variation in shopper behavior and competitive environments in different channels, markets and stores while achieving strategic and financial objectives.