E-commerce Case Study

E-commerce Case Study

How Etched adjusted overpriced products and increased revenue with catalan.ai

How Etched adjusted overpriced products and increased revenue with catalan.ai

46%

Higher Revenue

51%

Higher Units Sold

About the company

Etched is an environmentally friendly brand that sells paper products, like notebooks and sketchbooks, using stone paper, an eco-friendly alternative to traditional paper.



"How would I know that, for example, if I dropped prices by 20 cents, profits would increase by 50%? It’s very hard to reach such a conclusion with manual experimentation. With catalan you can get this and other insights after only a few weeks."

Saul Holding
Founder

About the company

Etched is an environmentally friendly brand that sells paper products, like notebooks and sketchbooks, using stone paper, an eco-friendly alternative to traditional paper.



The Problem


Time-consuming experimentation and pricing decisions


Saul Holding, Founder of Etched, described their pricing journey as a two-stage evolution before integrating catalan into their operations. Initially, they benchmarked against competitors to decide prices based on their desired positioning – a more luxurious brand that charged premium prices. In the second stage, they ventured into A/B testing trying new prices they thought would boost sales. A/B tests lasted about two weeks, or until they found a statistically significant result. They initially attempted to do them manually but eventually adopted A/B testing software from the Shopify app store. Still, the process of analyzing results and making final pricing decisions was time-consuming and took time away from other tasks that were critical for the business.


"Etched didn't have a well-defined pricing strategy, and I was not confident at all that we were pricing correctly," reflected Saul. "Were we losing potential sales due to high prices that tried to signal a premium product? Determining prices consumed excessive time – internal discussions, meetings, and A/B tests all contributed to prolonged decision-making."



The Solution


The third stage of Etched’s pricing journey featuring catalan


To address these challenges, Etched turned to catalan, leveraging the platform's dynamic pricing capabilities during a two-month pilot phase for 42 selected SKUs. Their primary objective was to enhance revenue. Employing a dynamic split-testing approach, Etched alternated between catalan-Priced Days and Etched-Priced Days, assigning each the responsibility for pricing during specific periods. This method aimed to uphold price stability, avoiding extreme fluctuations through the establishment of minimum and maximum price boundaries for individual SKUs. The choice of days for each pricing approach was randomized to eliminate potential biases.


Over the course of the pilot, catalan executed approximately 1,260 dynamic price changes. These adjustments, on average, resulted in price decreases across all 42 SKUs, as catalan detected that the products were slightly overpriced. Throughout the pilot, revenue increased for 27 SKUs and decreased for the remaining 15.


Summary of price changes and profit impact by SKU



"It was easy to trust catalan to manage Etched prices. Their native integration with Shopify makes the process of updating prices very simple without the need for manual intervention,” explained Saul.


The Results


Increasing revenue by setting lower prices that still signal a premium product


Catalan instilled confidence in pricing optimization. The platform delivered increased revenue and sales, revealing to Saul that even small price changes could yield significant revenue increases. On Catalan-priced days, Etched experienced a remarkable 46% increase in revenue and 51% increase in units sold, underscoring the power of dynamic pricing and the importance of correcting prices for overpriced products.


Saul reflected, "How would I know that, for example, if I dropped prices by 20 cents, profits would increase by 50%? It’s very hard to reach such a conclusion with manual experimentation. With catalan you can get this and other insights after only a few weeks."


In addition to its direct impact, catalan's role in automating pricing processes was noted. “I believe catalan is building a pricing operating system where individuals can set their pricing processes on auto-pilot, simply trusting the platform to set prices optimally,” Saul asserted.


Etched's journey with catalan not only improved their pricing strategy but also streamlined their operations, highlighting the power of data-driven decision-making.



Summary of price changes and profit impact by SKU



"It was easy to trust catalan to manage Etched prices. Their native integration with Shopify makes the process of updating prices very simple without the need for manual intervention,” explained Saul.


The Results


Increasing revenue by setting lower prices that still signal a premium product


Catalan instilled confidence in pricing optimization. The platform delivered increased revenue and sales, revealing to Saul that even small price changes could yield significant revenue increases. On Catalan-priced days, Etched experienced a remarkable 46% increase in revenue and 51% increase in units sold, underscoring the power of dynamic pricing and the importance of correcting prices for overpriced products.


Saul reflected, "How would I know that, for example, if I dropped prices by 20 cents, profits would increase by 50%? It’s very hard to reach such a conclusion with manual experimentation. With catalan you can get this and other insights after only a few weeks."


In addition to its direct impact, catalan's role in automating pricing processes was noted. “I believe catalan is building a pricing operating system where individuals can set their pricing processes on auto-pilot, simply trusting the platform to set prices optimally,” Saul asserted.


Etched's journey with catalan not only improved their pricing strategy but also streamlined their operations, highlighting the power of data-driven decision-making.



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Set pricing on auto-pilot with catalan

Set pricing on auto-pilot with catalan

Set pricing on auto-pilot

with catalan