Challenge
Challenge

With dynamic market trends and stiff competition, manual tracking of competitive prices became operationally inefficient. Client’s growth strategy needed a solution which could help them achieve the targets.

Solution
Solution

Flipkart Pricing Manager with AI/ML based pricing optimizer ensured the balance between topline, margins and competitiveness to achieve the category goals.

Result
Result

With the Pricing Manager solution the client observed a 30% increase in margins and increase in competitiveness by 500 bps with stable topline.

  1. Situation
    How to maintain Price Competitiveness with increased margins?

    The fashion category has been one of the fastest growing e-commerce categories and constitutes approximately 40% of the total value share in India. High growth in the market and stiff competition from major and local e-commerce platforms makes it imperative to have competitive pricing to ensure market share stability. 

     

    The client’s leadership team was expecting growth in revenues with improved profit margin but the Category manager of fashion accessories was facing challenges on multiple fronts as the top competitor in the market was aggressively pricing its products with discounts and deals frequently to attract customers to their platform.

     

    Additionally, the total portfolio for the category manager ran into thousands of SKUs. This made it operationally difficult to track the SKU’s manually for cost and inventory changes and competitive pricing and the category manager had to focus on only their top sellers on a regular cadence. The client understood the need for a more efficient method and was looking for a solution that would help him to dynamically price all their products keeping cost, inventory and competition in mind.

  2. Solution
    Dynamic pricing with AI/ML models

    To assist the category manager, Flipkart Commerce Cloud’s dynamic and predictive pricing solution was on boarded for the category’s pricing. The solution, which consists of state of art rules engine and Artificial Intelligence/Machine Learning models, looked at SKU’s historical data and business’s current objectives and suggested the pricing of the SKUs that optimized for the business goals around margins, revenue and competitiveness.

  3. Impact

    In addition to the implementation of the pricing solution, Flipkart Commerce Cloud’s consulting team with e-commerce expertise of over 14 years, supported the client to achieve their business objectives. Flipkart’s Pricing Manager helped the category manager to stay ahead of the competition and the fashion category saw an improvement in margins with stable top-line trends. Additionally, the portfolio where competition was better priced, saw better price competitiveness leading to a better conversion and perception.

    • Increase in margins
      30%
      Increase in margins
    • Increase in competitiveness
      500 Bps
      Increase in competitiveness

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