The retail industry by nature is dynamic, cyclically driven, and often reactive. It can be difficult for pricing managers to track the buying behavior trends of customers over time, especially when promotions are applied to certain products. Additionally, retailers often have a desire to quickly adapt to shifts in customer preferences, attitudes, and spending power and apply the right sales strategies to increase profits. Retailers are making faster and more efficient pricing and promotion decisions with the help of a new Fulcrum solution called RetailViewer™.
Retailer organizations are by their nature data-rich. Transactional records alone make up a wealth of information about product preferences and price sensitivity. When retailers can layer on data about promotional activity, customer-level data such as segment, and sales data such as store location or channel, the predictive power of the historical data set becomes incredibly powerful. Yet many organizations are unable to operationalize the reporting that would turn this wealth of data into actionable insights. RetailViewer is our web-based data analysis platform designed to bring together massive amounts of data into one analytical view, automate the previously manual ad-hoc analysis process, and visually explore the impacts of pricing and promotion across many metrics.
As a data science company, Fulcrum understands the nature of the analytics that retailers need to perform to optimize their business. We have built RetailViewer to allow retailers to quickly and easily compare competing and complementing pricing strategies, track promotion effects over time, and determine optimal price based on different objectives such as maximizing profit, household reach, or total store transactions. It is customizable to meet the unique requirements across different retailing industries as well as specific organizational needs. RetailViewer’s insights lead to higher profits in addition to increased efficiency when planning strategies and measuring results.
Applying the power of analytics to maximize pricing and promotion effectiveness
Retailers generally set prices to maximize profit subject to customer demand and supply costs, which can vary by season, region, and retailer competition. However, one of the major challenges within retail analytics is the number of products to manage and keep track of each item’s sales performance. Often, this is managed by performing isolated data queries and performing ad hoc data analysis to find insights. Sometimes, pricing strategies are managed by gut feel alone. What most retailers are missing is an automated analytical reporting solution to generate more detailed insights across all products and promotions quickly and with greater accuracy than is possible through spreadsheet-based ad hoc analysis. RetailViewer provides this platform for analysis.
Often, retailers lack the data-driven tools to measure the effectiveness of pricing strategies for products with many historical price points. Some price points which are a mark-down from regular pricing do not generate sufficient demand to offset the loss in margin. Viewed week to week, the impact of the mark-down pricing may be missed within the noise of other sales activity, but when analyzed broadly over a longer period of time the patterns of a specific product’s pricing impacts are more transparent. The challenge of summarizing the data for the isolated product over the right period of time and making it actionable is achieved with just a quick series of clicks within RetailViewer.
Retailers may have different goals based on what they sell, and the goals may even change for different time periods. Maximizing profit, household penetration, or total basket size for instance, may require the setting of different optimal prices. Transaction history of past prices, promotions and sales provides a rich source of data to determine the optimal pricing strategy for each goal, but many BI reporting platforms do not facilitate this kind of scenario analysis. RetailViewer summarizes and cuts the data to measure against the goals of a promotion or pricing tactic.
Delivering a solution to address the needs of retailers
Fulcrum’s RetailViewer provides a holistic view of a retailers’ performance as well as detailed insight into past promotions and pricing impacts at the product level. To begin, RetailViewer provides an enterprise-level summary of sales performance, overall profit, performance by region and other standard sales metrics. A deeper dive begins by selecting from various filters, such as by departments, product groups, store locations, or sales channels. Individual products can be searched, and multiple SKUs can be selected at once to compare product performance. Once products have been selected, the demand analysis section produces a thorough view of the historical sales, profits, and promotions for the products. Through the application of filters and chart types, sales performance is visualized across price points, time of the year, promotion, channel and region.
RetailViewer helps identify optimal product-level pricing strategies across sales metrics (revenue, units), customer metrics (household penetration, segments), channel, market, and financial metrics (profit, incremental profit), depending on the business objective. The user can forecast whether putting items on promotion will more effectively increase the number of households reached versus the units purchased per household, for example.
Summary of benefits
Not only is RetailViewer incredibly easy to use through its point and click web-based user interface, but it allows the user to take a customized deep dive into their products and promotions to gain detailed insights.
Common pricing questions addressed by RetailViewer:
- What combination of price and promotion work best? How does it differ by channel or region?
- How do sales of similar products compare – which yields higher profit?
- Which price points drive stock-up behavior versus improving customer reach?
- Which customer segments respond to price discounts versus promotion?
- Ingest daily line-item level transaction feeds
- Ingest promotional history
- Aggregate all of your products, promotions, and profits for comprehensive analysis
- Be customized to include many product, store, channel or customer dimensions
- Summarize the performance of an item/promotion based on your needs
- Provide detailed product analysis in visual form and tables
- Export chart images and data files from the web interface
RetailViewer can be hosted on the Fulcrum private cloud or on-premises depending on an organization’s preference.
So whether you’re a retailer looking to build a more agile analytics practice or a national brand looking to quickly optimize pricing and promotion decisions, RetailViewer allows for retailers and pricing analysts to focus on the most important profit-driving factors. Curious how RetailViewer might be able to streamline your business analysis? Contact us to find out more.