Pricing Platform
Italy’s Leading Electronics Retailer Boosts Bottom Line With FCC’s Predictive Pricing
Challenges
Italy's top electronics retailer faced shrinking profit margins, intense competition, and struggling with low-selling products. The need to optimize the sales of 2 million products, scaling up to 5 million in 9 months, demanded a scalable, real-time pricing solution.
Solution
FCC's Pricing Intelligence solutions was implemented, incorporating over 1400 pricing rules and introducing a cascading strategy. This approach seamlessly integrates with their existing system and dynamically adjusts pricing based on market conditions.
Result
The retailer experienced up to 84% profit lift in long-tail categories and a significant growth in overall profitability. The modular and scalable architecture facilitated a rapid 8-week ramp-up time, showing a remarkable improvement in the bottom line.
How to overcome eroding profit margins amidst fierce competition?
The retailer, serving over 20 million customers, found itself needing help with decreasing profit margins and an onslaught of powerful online competitors. Compounded by a significant number of low-selling products in their inventory, they needed a solution to optimize the sales of 2 million products, scaling up to 5 million within nine months.
The existing infrastructure and management tools needed to be improved to support the necessary scalability and configurability for real-time market responses. Repricing offerings multiple times a day to keep up with the dynamic market was a challenge that could not be met with their current systems.
The client needed an agile and scalable solution to refine their pricing strategy and achieve sustainable profitability while maintaining competitiveness both locally and globally.
The existing approach of comparing total SKUs at the category level and onboarding long-tail selection was inefficient. It required a solution that could handle the heterogeneity of the category, dynamically optimize pricing, and accurately identify assortment gaps to onboard the right selection.
Leveraging predictive pricing for retail success
Flipkart Commerce Cloud (FCC) implemented the Predictive Pricing and Pricing Intelligence solutions to address the retailer's challenges. By leveraging advanced machine learning models and high-quality retail data, FCC's solutions dynamically adjusted prices in real-time, considering demand elasticity and competitor moves.
The scalable, modular architecture allowed for seamless integration with the retailer's existing systems, enabling the efficient management of millions of SKUs. Over 1,000 pricing rules were imported from the retailer's legacy system and used as guardrails to ensure optimal pricing strategies, resulting in improved profitability and market competitiveness.
Impact
The adoption of FCC's Predictive Pricing and Pricing Intelligence solutions substantially improved the retailer's profitability and operational efficiency. Long-tail products saw profit lifts of up to 84%, and the dynamic pricing strategies contributed to overall gross margin stability.
The scalable architecture and real-time adjustments enabled the retailer to maintain a competitive edge in both local and global markets. These enhancements allowed the retailer to serve its extensive customer base better while achieving significant financial gains.
