Leading optical retailer increased sales by 32% with Imprice

CUSTOMER
PROFILE:

Location:
● Russia

Industry:
● Optical chain,
e-Commerce and brick-and-mortar stores.

"Happy Look" is in the top 3 Russian optical chains (source: GfK data)

It counts 200+ optical stores
located in more than 50 cities.

Website:
happylook.ru

In October 2019, "Happy look" launched a pilot test of
dynamic pricing for its online store with Imprice.

The retailer started by automating the prices of the contact
lens assortment category, which faced tough competition in
the market.

Key results

The results for October and November 2019 were as follows:

Number of online orders growth

Gross profit
growth

Average Order Value growth

Revenue
growth

The retailer's team compared average sales in October and
November to average sales in January-September 2019.
The dynamics of sales and the influence of seasonal factors were
considered in calculations.

Outgrowing old non-automated
processes

BUSINESS
TARGETS OF
THE PILOT:

● Revenue growth

● Gross profit growth.

● Average Order Value growth.

● Number of online orders
growth.

The company's assortment consisted of two segments:

Segment 1. Glasses and sunglasses, mostly with private
labels of the optical chain. An assortment without direct
competition.
Segment 2. Contact lenses from global brands. A market
segment with numerous players and pricing pressure.

Before the pilot, a pricing specialist set prices for contact
lenses manually every time:
1) He visited one of the largest price aggregators in the
domestic market.
2) He then sampled competitors' prices from the price
aggregator by manually monitoring 16,000 SKUs.
3) Finally, he calculated prices using Excel, for online and
brick-and-mortar stores.

With such a pricing approach, routine actions and endless
self-checks took all the specialist's time.

To ensure price attractiveness for customers, the company
often set prices at a minimum market level, and changed
prices rarely. The pricing team felt a lack of complete and
regular analysis of competitors. As the company planned to
penetrate a new market, pricing specialists were looking for a
technical decision to optimize the pricing process and to
improve pricing efficiency.

An agile data-driven solution

IMPRICE
MODULES:

● competitive pricing

● zone pricing
(pricing strategies were optimized at the city-level)

● KVI pricing

To hit its business targets, the optical chain required an
automated tailored approach to pricing in every segment and
every pricing zone. The pricing team chose Imprice platform
due to the following features:


✓ Imprice automatically collects
competitors' prices from their websites and price
aggregators.
If required, it is possible to set an individual list of
competitors for any region, any segment of goods, any brand,
even any SKU.

✓ Imprice automatically recalculates prices considering
changes in competitors' prices, all internal factors, and
constraints.
Minimum price recalculation interval —
every 10 minutes.

To run automated pricing, it's only required:
– to set up data exchange between Imprice and the company's
ERP System,
– to launch competitors' data collection by Imprice,
– to enter rules and constraints into the Imprice platform.

Let's review step by step how automated pricing was
implemented in the case of the optical retailer.

1) Competitors' data.

STEPS:

● Competitor's
data.

● System
integrations.

● Pricing
strategy and
support.

● Data exchange
between Imprice
and the online
store.

● Instant
analytics and
corrections.

● Additional
optimization.

It took only two weeks to run competitors' prices collection from a pricing aggregator.

Imprice team matched 16,000 SKUs with competitors' goods
on the aggregator. Competitors' prices were loaded from the
aggregator into the retailer's account on the platform and
started to renew automatically within set intervals.

2) System integrations.

It was required to load into Imprice all contact lenses SKUs
and relevant data: stocks, actual online store prices, costs of
goods, and also suppliers' prices for future costs calculations.

Imprice team created a new tool for suppliers' prices
loading; it had taken a few hours only. Exchange of other
data between the retailer's ERP and Imprice was run with a
prebuilt API.

3) Pricing strategy and support.

Before the pilot, the retailer's team and Imprice experts worked out a new pricing strategy for the online store and a set of relevant pricing rules.

After deploying and setting up the project, Imprice experts
introduced a pricing specialist how to work with the
platform, and then helped him to enter rules and constraints
into Imprice for optimal prices calculating.

This training took a few hours, and then the pricing specialist
easily worked with the Imprice platform without any help.

4) Data exchange between Imprice
and the online store.

Since competitors' data and ERP data were loaded into Imprice, pricing experts ran an Imprice analytics module.
They found out, a lot of non-automated prices of the optical retailer were lower than its competitors. Other non-automated prices were higher than the market level.

The Imprice platform then calculated prices with new rules for the first time. To ensure the efficiency of new prices, the online store team compared new prices with actual prices and competitors' prices. Then Imprice technical specialists set up automatic loading of calculated prices into the retailer's data bus.

Starting 10 October 2019, the online store began to work with new prices calculated by Imprice.

5) Instant analytics and corrections.

The pricing team monitored the online store results every day. They checked the changes in revenue, gross profit, average order value and number of online orders.

In a few days, they observed three trends:

Trend 1. Despite the increase in prices of some SKUs, the number of online orders grew a bit.
A new automated pricing strategy raised gross profit.

Trend 2. Prices of some SKUs were reduced to market levels.
Online customers started to order contact lenses that were ignored before because of high prices.

Trend 3. New prices cut demand for large packs of lenses, so the average order value was reduced.

Due to trend 3, pricing experts created a new segment in the Imprice platform for expensive SKUs. It took one day to describe special scenarios and to create pricing rules for this segment. With those new rules, prices of large packs became much more attractive on the market.
A pricing specialist entered new pricing rules into Imprice.
The next day, average order value and revenue rose sharply.
The online shop started to gain significantly higher sales compared to the manual pricing period.

6) Additional optimization.

The pricing team continued to optimize their pricing:
– They identified new specific segments of goods.
– Then they created efficient pricing rules for those segments.

For example, pricing experts created the segment of KVIs, and implemented KVI pricing strategy.

Business results

RESULTS:

+ 19,7% Average Order Value growth

+ 14,1% Number of online orders growth

+ 31,2% Gross profit growth, due to Average Order Value increase

+ 32,3% Revenue growth

The retailer's team compared average sales in October and November to average sales in January-September 2019.
The dynamics of sales and the influence of seasonal factors were considered in calculations.
Using Imprice, the optical chain gained quick multiplied returns in efficiency and ROI.

The retailer's pricing turned into a fully-automated, transparent and easy to manage process.
The Imprice Analytics module was very helpful for that, providing a lot of reports, plots, dashboards and data tables.