Company
A US Fortune-500 convenience store chain offering a wide-ranging portfolio of consumer products across multiple categories like Tobacco, Beverages, Fuel, Food, etc.
Annual Revenue Range:
>$1B
Industry:
Retail
Locations:
USA
Deployed Solution(s):
Vistaar SmartPricing
Business Challenges
• Convenience stores face a tightrope walk with complex regulations and taxation laws on the one-hand and shrinking profits, and fierce competition on the other. In this context, accurate pricing of tobacco products, typically a store traffic driver is of vital importance to all retailers.
• Given this tough business environment, pricing at the store-level for all products in itself is a challenge given that the sheer volume of price points under management run into millions. Further, frequent changes in promotions and eligibility criteria means that retailers need to be geared up to quickly adjust pricing accurately to avoid loss of suppliers as ‘billbacks’.
• Finally, the company’s reliance on manual pricing updates, managed through cumbersome Excel spreadsheets, created significant bottlenecks. This slowed their response to competitor price changes and market fluctuations. As a result, the company missed out on crucial sales opportunities and saw their market share steadily decline. This ultimately impacted profitability, highlighting the need for a more sophisticated pricing solution.
Vistaar Solution Highlights
• An end-to-end SaaS retail pricing solution that manages the complete process from surveys to price setting to performance measurement and tracking for highly regulated tobacco and beverage alcohol products.
• Optimized price & promotion strategies using a comprehensive set of best practices, business constraints and rules, ensuring recommended prices are directly actionable.
• Optimized Price Recommendation and associated impact projections based on Margin or Vol Maximization or Balanced Growth objectives.
• Demand decomposition using price elasticity, promotional effects, and seasonality by store segment, enabling competitive intensity and demographic/consumer profiling.
• A configurable Competitor Reference Price (CRP) modelling framework at store segment or store level using competitor distance, type, and priority, among other attributes.
• “Anchor” product-driven pricing with adherence to relative price constraints, regulatory constraints, and contractual obligations across brands and markets.
• Sandboxing based on projected volume, revenue, and margin enabling what-if analysis for proposed prices, coupled with a configurable, multi-level approval workflow.
• Proactive system alerts to ensure timely price action based on tracking of sales/margin trends and competitive pricing.
• End-to-end survey management capabilities for comprehensive survey data gathering and processing including automated data clean-up and price corrections using intelligent algorithms.
• Direct API integration with key suppliers like Altria and RJR for inbound supplier-funded upcoming promotions data.
• Seamless integration with downstream systems for price execution at the store-product level.
Sources of value
The broad objectives of their pricing journey were to industrialize pricing processes across the 4000 + stores with a focus on improving pricing accuracy, creating efficiency gains, minimizing loss of promotional discounts and billbacks from suppliers, and replacing a person-dependent process with an objective, rule-driven pricing process.
Vistaar SmartPricing for Tobacco Retailers empowered users to embrace scalable pricing methodologies and quickly adapt to changes in the market and regulatory compliance, standardize communications and workflows, automate price publishing and distribution, and maintain meticulous oversight through comprehensive audit and tracking capabilities.
Furthermore, Vistaar’s AI/ML-powered objective-driven optimized price guidance seamlessly integrated strategic business objectives and constraints into pricing strategies, fostering profitable growth.
