One of our customers, a global clothing and accessory retailer, was looking for a more effective way to manage their prices. Competitive threats precipitated the need to change prices frequently which stressed their existing process. Their merchandising and pricing teams struggled with correcting price mistakes quickly and identifying where errors occurred. Their process was caught in a cumbersome coordination between their host merchandising, spreadsheets, eCommerce, and Point of Sale systems. The system we implemented made the process more effective, improved the speed at which they could respond to price mistakes, and gave them visibility to where the errors were happening. Below is a review the benefits they received and how we helped them.
Business Case. It is critical to have a well-defined business case that outlines the purpose of the project as well as a goal statement that addresses the business case. In this case, the objectives were clear:
Ability to react quickly and flexibly to local market conditions
Correct mistakes faster through direct integration into downstream systems
Identify problems faster with better visibility into where the errors occurred
Consolidate pricing activities into a single system of record
Better flexibility in local markets. As the competitive landscape changed, our customer needed the ability to change prices easily across local markets. While price changes were possible in their previous process, a lot of manual effort was required. Through the new tool and process we implemented, merchandisers were given the flexibility to change hard marks, sale, clearance, and promotional prices for any product and store combination. This laid the foundation to rapidly change prices. All prices are managed centrally and then individual files are generated for each store or the eCommerce site. In the future, they may take advantage of real time APIs which would allow systems to immediately receive price updates without any delay.
Correct mistakes faster. Correcting mistakes faster was a top priority in accordance with their business case. Today’s retailers must have accurate pricing and be able to react quickly to errors. The previous process would take about 2 to 2.5 hours to update mistakes or simply send out midday updates. With the new solution the time was slashed to 20 minutes. The previous process went through several steps with intermediary systems. Now, they are able to generate the price change directly for the given stores and distribute the files immediately which are then transferred to the POS.
Gaining visibility to pricing outcomes. Prices were buried in spreadsheets and often it was difficult to determine the actual effective price given overlapping hard marks, promotions, and stackable coupons. In many organizations different people are responsible for merchandising and marketing and the ultimate margin is estimated until sales data is returned. With the new tool, users are able to see how the prices were built, who created the promotion or coupon, and when it is effective. The price administrators are able to search across the time horizon to see if a future price change will affect their expected margins. Prior to the new process when a store recognized a price was wrong, they would notify the business who would then go through a flurry of emails to figure out where the error occurred. Now, the pricing team is able to look up the item, find out exactly which promotions are applied, and correct the error quickly.
Consolidating pricing activities. In the previous pricing process, activities were split between the host merchandising system, spreadsheets, and a separate system for multi-item deals. Our customer wanted to consolidate those functions to have a single system for hard marks, clearance, sale, promotions, and deals. They were able to do that through the new system which allows them to manage their prices and then distribute to their various channels.
Future considerations. Looking into the future, our customer will be able to move price entry into the hands of the merchants rather than having a dedicated team for price entry. This will allow the pricing team to focus on more strategic initiatives. The next area of focus is store communications. They manually create a document for store managers that tells them price changes and product placement. With the addition of product placement information, the new solution will automatically generate this document. This will streamline the process the merchandisers do to get information to the stores. Finally, they are considering an Asia Pacific rollout and real time connections to systems to cut the response time further.
We were able to address the issues discussed above working with a cross functional team of merchants, eCommerce, IT staff, and pricing managers. Working with these teams, we identified the critical issues with the process and implemented new capabilities that ultimately saved them time and money.
One of our customers, a global clothing and accessory retailer, was looking for a more effective way to manage their prices. Competitive threats precipitated the need to change prices frequently which stressed their existing process. Their merchandising and pricing teams struggled with correcting price mistakes quickly and identifying where errors occurred. Their process was caught in a cumbersome coordination between their host merchandising, spreadsheets, eCommerce, and Point of Sale systems. The system we implemented made the process more effective, improved the speed at which they could respond to price mistakes, and gave them visibility to where the errors were happening. Below is a review the benefits they received and how we helped them.
Business Case. It is critical to have a well-defined business case that outlines the purpose of the project as well as a goal statement that addresses the business case. In this case, the objectives were clear:
Better flexibility in local markets. As the competitive landscape changed, our customer needed the ability to change prices easily across local markets. While price changes were possible in their previous process, a lot of manual effort was required. Through the new tool and process we implemented, merchandisers were given the flexibility to change hard marks, sale, clearance, and promotional prices for any product and store combination. This laid the foundation to rapidly change prices. All prices are managed centrally and then individual files are generated for each store or the eCommerce site. In the future, they may take advantage of real time APIs which would allow systems to immediately receive price updates without any delay.
Correct mistakes faster. Correcting mistakes faster was a top priority in accordance with their business case. Today’s retailers must have accurate pricing and be able to react quickly to errors. The previous process would take about 2 to 2.5 hours to update mistakes or simply send out midday updates. With the new solution the time was slashed to 20 minutes. The previous process went through several steps with intermediary systems. Now, they are able to generate the price change directly for the given stores and distribute the files immediately which are then transferred to the POS.
Gaining visibility to pricing outcomes. Prices were buried in spreadsheets and often it was difficult to determine the actual effective price given overlapping hard marks, promotions, and stackable coupons. In many organizations different people are responsible for merchandising and marketing and the ultimate margin is estimated until sales data is returned. With the new tool, users are able to see how the prices were built, who created the promotion or coupon, and when it is effective. The price administrators are able to search across the time horizon to see if a future price change will affect their expected margins. Prior to the new process when a store recognized a price was wrong, they would notify the business who would then go through a flurry of emails to figure out where the error occurred. Now, the pricing team is able to look up the item, find out exactly which promotions are applied, and correct the error quickly.
Consolidating pricing activities. In the previous pricing process, activities were split between the host merchandising system, spreadsheets, and a separate system for multi-item deals. Our customer wanted to consolidate those functions to have a single system for hard marks, clearance, sale, promotions, and deals. They were able to do that through the new system which allows them to manage their prices and then distribute to their various channels.
Future considerations. Looking into the future, our customer will be able to move price entry into the hands of the merchants rather than having a dedicated team for price entry. This will allow the pricing team to focus on more strategic initiatives. The next area of focus is store communications. They manually create a document for store managers that tells them price changes and product placement. With the addition of product placement information, the new solution will automatically generate this document. This will streamline the process the merchandisers do to get information to the stores. Finally, they are considering an Asia Pacific rollout and real time connections to systems to cut the response time further.
We were able to address the issues discussed above working with a cross functional team of merchants, eCommerce, IT staff, and pricing managers. Working with these teams, we identified the critical issues with the process and implemented new capabilities that ultimately saved them time and money.