How to overcome the assortment and pricing challenges in the diverse furniture and furnishing category?

The furniture and furnishing category is complex and challenging. With only 20% of branded SKUs and the rest being non-branded products, identifying gaps in assortment becomes difficult, especially when attributes for product matches are limited to SKUs. Customers have varied tastes and look for a wide selection in depth and breadth. Additionally, optimizing pricing for different sub-categories posed another challenge.

The beds category, a growing segment, required the right pricing to maximize revenue without leaking margins, while the home furnishings category needed to maximize margins while maintaining revenue.

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.

Implementing FCC's Innovative Pricing Solutions

Flipkart Commerce Cloud (FCC) introduced a proprietary market SKU (MSKU) algorithm to identify gaps in the assortment by breaking down each category into smaller cohorts based on product attributes. This solution allowed for the accurate matching of SKUs to their respective product cohorts.

FCC employed advanced elasticity models and game theory simulations to optimize pricing at the product cohort level, ensuring the right pricing strategy for different sub-categories. The scalable, modular architecture facilitated seamless integration and dynamic pricing adjustments, significantly enhancing product management and selection accuracy.