Focused on providing cost-conscious consumers with a wide assortment at budget prices, Family Dollar is tapping technology from Revionics, Inc. to optimize pricing for the chain’s rapidly expanding product assortment. Family Dollar has successfully rolled out the Revionics Everyday Price Optimization solution to all 6,700 stores.
While pricing processes had previously been “manual, subjective and tactically-focused,” according to Family Dollar VP of Information Technology Scott Zucker, the retailer is now able to make fact-based pricing decisions across a wide range of product categories and a diverse store base. “We can model various pricing strategies, understand the impact on sales and profit and act quickly to capture the benefits,” Zucker said.
“Our whole focus has been about serving low to middle income consumers, with a typical income of $40,000 or less,” Zucker said in a video interview. “These are people that are looking for good value [and for] items to be priced right. They typically walk into the store with ten dollars in their pocket, so we have to make sure that we are very sharp on our prices.”
Family Dollar has been working closely with Revionics for the last 12 months to foster a dialogue with planners and buyers to approach pricing more strategically and have a comprehensive view of store impact. The chain is using Revionics’ Everyday Price Optimization Solution to help them achieve industry-leading financial performance, while still delivering a compelling value and convenience proposition to their customers.
“Family Dollar has a delicate ‘balance’ to maintain when it comes to pricing. The company must protect their very powerful price image while simultaneously driving improvements in sales, margin and inventory,” stated Kathleen Egan, Vice President of Professional Services for Revionics. “Over the past year, Family Dollar has partnered closely with us to innovate our Everyday Pricing solution. This strategic partnership is not only a huge win for both companies; it ultimately benefits Family Dollar customers.”
In July, Family Dollar recorded its ninth straight quarter of double-digit earnings growth on a per-share basis and “significantly” improved margins, according to The Wall Street Journal.