Pricing Analytics Transformation for a Global Beauty Retailer
Technology Category
- Sensors - Level Sensors
Applicable Industries
- Consumer Goods
- Retail
Applicable Functions
- Sales & Marketing
Use Cases
- Retail Store Automation
- Theft Detection
About The Customer
The customer is a multinational retailer of personal care and beauty products. They have a significant market presence with approximately $5B in retail sales annually. The customer operates in a highly competitive market, with major competitors like Ulta Beauty, Macy’s, and Amazon. They have a vast network of over 1,100 locations across the US market. The customer was seeking to optimize their retail pricing to maximize revenue and margin while minimizing traffic loss. They required a data-driven approach to guide strategic price and promotion adjustments, adhering to industry MSRP and MAP restrictions.
The Challenge
The client, a multinational retailer of personal care and beauty products, was seeking to optimize their retail pricing for approximately $5B in retail sales annually. The challenge was to maximize revenue and margin while minimizing traffic loss. The client needed a data-driven approach to guide strategic price and promotion adjustments, adhering to industry MSRP and MAP restrictions. They also required weekly competitive intelligence on portfolio-wide pricing, promotions, and inventory levels for major competitors like Ulta Beauty, Macy’s, and Amazon.
The Solution
The solution involved leveraging extensive analytics expertise to model product level elasticities, identify price sensitivities, and simulate revenue impact. This data-driven product segmentation was designed to guide pricing decisions. The consultants provided weekly competitive intelligence on portfolio-wide pricing, promotions, and inventory levels for major competitors. They also enabled the client to adjust prices and promotions more dynamically by having access to a web tool which feeds competitor price changes at a weekly level. This tool could track any change in price, promotion, or out of stock status directly from Ulta Beauty, Macy’s, and Amazon. Additionally, they delivered store tiering and stratified price guidance for over 1,100 locations across the US market, factoring in tourist demand, sales performance, product mix, and competition into store classifications.
Operational Impact
Quantitative Benefit
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