Corus Consulting implemented a system on optimization of pricing for the Russian DIY network "Vimos"

2020: Pricing optimization

Corus Consulting announced on December 18, 2020 system implementation on optimization of pricing for the Russian DIY network TD "Vimos". Now the retailer creates the optimal prices using the algorithms of artificial intelligence which are built in the solution that helps the company to increase profit.

The network needed to maximize profit during a season, to save its level in the period of "calm", at the same time having kept purchasing force on key categories and not having changed a price segment. All this required uncommon approach to management of the prices, cardinal review of methodology and approach to business processes and also the choice of the reliable IT tool. For the solution of these tasks on business and to IT consulting the company addressed specialists of CORUS Consulting Group.

After project evaluation consultants suggested to build the solution based on Competera Pricing Platform which automates pricing using artificial intelligence. Specialists integrated the tool with the accounting systems of retail network, structured and cleaned historical data, helped to organize daily unloading of changes.

Piloting of the project was carried out on several trade bases. A system analyzed sales 25 thousand goods (except for goods of KVI and promo) and offered the changes in price taking into account the business restrictions and rules created for "Vimos". Within a quarter of analytics of Corus Consulting together with specialists of network weekly carried out revaluations and also heads of the commodity directions were helped with work with a system and by interpretations of the proposed price solutions.

Based on the pilot revenue of TD "Vimos" grew by 10%, a gross profit – for 9%, and sales in units – for 6%, and all this when preserving level of marginality. Indicators are recorded for 10% of geography of representation of network. The company got an additional profit and lowered load of heads of the commodity directions. For December, 2020 the decision on a project rollout on all network is made that includes scaling of the Competera platform, audit of price policy and tactics, review of price zones and competitive strategy, implementation of regular market monitoring, a range clustering, selection of the isolated function in commercial division and other.

Before the companies there is always a question how to implement financial potential. In the conditions of fierce competition and saturation of the market goods normal methods like a raising of a margin cease to work. Solutions for optimization of pricing based on artificial intelligence – reality of the Russian retail. Such algorithms reveal dependences in commodity categories or between them, cannibalization of categories or separate goods, trends of the markets and tens of other internal and external factors influencing sales. Retail chain stores saved up enough data that neural networks could set interrelations of factors which are often unevident to the person and to recommend the optimal prices for goods both for buyers, and for retail chain stores. And we are glad that TD 'Vimos' learned by own experience in efficiency of similar solutions, – Sergey Vorobyov, the head "Pricing Optimization" of department of analytical solutions of CORUS Consulting Group comments.

Long there was an opinion that similar solutions are demanded only in product retail, but our project proves that it not so. We already see big return from optimization of pricing and we are going to develop further a system using specialists with Corus Consulting, – Ekaterina Kantina, the chief financial officer of Vimos trading house says.