Best-in-class retailers are collecting and analyzing data in real time to make more efficient decisions — especially around pricing and promotions.
Because price is such a strong competitive differentiator, it is imperative that retailers have the customer and click-and-mortar insight to ensure they have optimal pricing strategies in place. These strategies particularly are important for retailers providing outdoor goods, including garden and pool products, which traditionally rely on aggressive pricing and promotion tactics to pique consumer interest.
To address its outdoor products pricing initiatives, City Farmers has partnered with Revionics, a merchandise optimization solution provider, to increase customer satisfaction and overall profits with smarter, more data-based decisions.
By implementing the Price and Promotion Optimization solutions from Revionics, City Farmers can be more competitive and deliver upon customer wants and needs more effectively, Clayton Hollingsworth, CEO and Managing Director of City Farmers, told Retail TouchPoints.
“We are a very data-driven company,” Hollingsworth said. “More than 80% of all transactions are captured through our rewards program, which better enables us to really understand what our customers want, then meet demand effectively.”
Based on sales results and deal redemption data gathered from its loyalty program, as well as insights from a 10% sample survey of daily in-store shoppers, City Farmers discovered that both daily and promotional pricing were key areas that required improvement.
“The objective is to have every customer happy with our pricing strategies across all locations,” Hollingsworth noted. “We also want our team members to be comfortable that our pricing is always fair, well researched and best reflects the quality and attributes of the product while also considering competitor offers.”
With the Revionics Pricing Optimization solution, City Farmers can leverage internal and external information points, and apply data to individual SKUs as well as category groups. Affinity products associated with a particular SKU and potential substitution products also can be pinpointed, Hollingsworth reported. This multifaceted approach will help ensure that logic is at the center of all pricing decisions. “The entire pricing process will be transparent,” he added, “so we always know why a price is going up or down and what the effect on the business will be.”
The Revionics Promotion Optimization solution also will help City Farmers better strategize sales and offers, allowing customers to get discounts while still providing the retailer with sustainable results.
“Letting our data talk and determine our decisions will allow a lot of the ‘smoke’ surrounding our pricing and promotion strategies to disappear,” Hollingsworth explained. “We will be able to make decisions quickly and more logically. We will also have better team congruence regarding price, which will free up time at both a management and store level to better drive the business.”