Groceries Case Study

Grocery Case Study

Automating Grocery pricing for Profitable Growth: Catalan's 18% Revenue Lift

18%

Higher Revenue

Gross Margin Increase

Client Overview

A leading grocery retailer operating across multiple countries in Latin America, and facing intense competition in various markets, partnered with Catalan to tackle a crucial objective: increase revenue while ensuring a minimum margin threshold. The retailer provided Catalan with control over pricing in specific key cities, seeking agile, data-driven daily price adjustments to stay competitive while protecting profitability in these diverse urban environments.

"The catalan pilot consistently delivered an increase in revenue compared to the control group, all while preserving our gross margin. We are enthusiastic about extending our collaboration as strategic partners, aiming to broaden our scope for continued success.”

VP of Pricing & Discounts

Client Overview

Objective

Increase revenue while ensuring a minimum margin threshold through agile, data-driven price adjustments on a daily basis.

Key Challenges

Erosion of Profitability: The retailer's existing growth-driven pricing strategy often sacrificed profitability, leaving potential revenue on the table with each transaction.

Need for Market Responsiveness: In an intensely competitive market, the retailer had to keep pace with external factors, including competitor prices, seasonality, and shifting market conditions, while maintaining its profitability targets.

Manual Pricing Inefficiencies: The manual processes for price setting were not only slow but also prone to human error and emotional decision-making, leading to inconsistent pricing and missed revenue opportunities.

Catalan’s Tailored Solution

To address these challenges, Catalan partnered with the retailer to design and implement a dynamic pricing strategy focused on maximizing revenue and profit, while adhering to their margin goals. The comprehensive solution included:

Dynamic Pricing Model: Catalan’s AI-driven pricing model factored in multiple variables—competitor pricing, seasonality, inventory levels, and more. This ensured pricing was competitive yet aligned with margin targets.

Automated Price Adjustments: By automating SKU-level pricing, the retailer significantly reduced the risk of human error and ensured prices were optimized daily, without manual intervention.

Real-Time Insights Dashboard: The retailer was equipped with a powerful, real-time dashboard that provided actionable insights. This enabled the pricing team to analyze and adjust the algorithm's decisions, gaining transparency into performance and empowering more informed strategic decisions.

Measurable Results

Revenue Boost: Catalan’s dynamic pricing strategy delivered a remarkable 18% revenue increase compared to a control group that maintained the previous pricing approach.

Margin Enhancement: Alongside revenue growth, the retailer experienced a 3% lift in gross margin, achieving both volume and profitability goals simultaneously.

Strategic Impact

Implementing Catalan's solution did more than increase the retailer’s financial performance. The automated dynamic pricing system transformed their approach to pricing:

Operational Efficiency: Automation removed the inefficiencies and biases of manual pricing, streamlining operations.

Sustainable Profitability: With precise, real-time adjustments, the retailer transitioned to a more sustainable, profit-focused pricing model.

Competitive Edge: By responding rapidly to market dynamics, the company gained a competitive advantage, positioning itself as a market leader in both pricing strategy and profitability.

Catalan's solution not only boosted the bottom line but also reshaped the retailer's strategic outlook, setting a new standard for pricing excellence in the grocery sector.

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"The catalan pilot consistently delivered an increase in revenue compared to the control group, all while preserving our gross margin. We are enthusiastic about extending our collaboration as strategic partners, aiming to broaden our scope for continued success.”VP of Pricing & Discounts

"The catalan pilot consistently delivered an increase in revenue compared to the control group, all while preserving our gross margin. We are enthusiastic about extending our collaboration as strategic partners, aiming to broaden our scope for continued success.”VP of Pricing & Discounts

"The catalan pilot consistently delivered an increase in revenue compared to the control group, all while preserving our gross margin. We are enthusiastic about extending our collaboration as strategic partners, aiming to broaden our scope for continued success.”VP of Pricing & Discounts

"The catalan pilot consistently delivered an increase in revenue compared to the control group, all while preserving our gross margin. We are enthusiastic about extending our collaboration as strategic partners, aiming to broaden our scope for continued success.”

VP of Pricing & Discounts

"The catalan pilot consistently delivered an increase in revenue compared to the control group, all while preserving our gross margin. We are enthusiastic about extending our collaboration as strategic partners, aiming to broaden our scope for continued success.”

VP of Pricing & Discounts

"The catalan pilot consistently delivered an increase in revenue compared to the control group, all while preserving our gross margin. We are enthusiastic about extending our collaboration as strategic partners, aiming to broaden our scope for continued success.”

VP of Pricing & Discounts