Conad del Tirreno

Smarter pricing strategy improves retail margins, competitiveness

Published on 30-Aug-2010

Validated on 07 Jan 2013

"With the IBM–DemandTec solution we have learned much more about our customers’ behavior and to work in a different way throughout the whole organization by simulating any scenario before applying the suitable choice." - Ugo Baldi, Conad del Tirreno CEO

Customer:
Conad del Tirreno

Industry:
Retail

Deployment country:
Italy

Solution:
Selected Business Solution (sBS), Application Design-Build-Manage, Business Continuity, Business Performance Transformation, C-Suite Framework, Smarter Commerce, Smarter Planet

Smarter Planet:
Smarter Solutions for Retail

IBM Business Partner:
DemandTec Inc

Overview

Conad del Tirreno is a large cooperative of independent contractors. In the GDO Retail Italian marketplace, Conad del Tirreno is part of a much larger company with more than 5,600 employees and more than 250 stores located in Central Italy (in particular the Tuscany, Lazio and Sardinia regions). Conad del Tirreno is part of the much larger Conad organization, which is the second-largest retail organization in Italy, with over €9 billion in annual turnover, and more than 2,500 stores.

Business need:
Conad del Tirreno is part of Conad, the second-largest retail organization in Italy. The retailer was facing increased price competition. The company decided it needed to remove itself from this price reduction spiral, and at the same time improving his competitiveness and price perception by implementing a Price Optimization strategy and execution with the help of a strong solution partner.

Solution:
Conad del Tirreno has implemented IBM Business Partner DemandTec Everyday Price Optimization™ solution to manage prices in a dynamic way by focusing on consumer behavior and demand instead of just on product costs and competitive price. By computing the right price for a product, based on enormous volumes of customer-related data and simulations, Conad del Tirreno can determine the most attractive prices for its products.

Benefits:
· Provides a detailed analysis for existing customer behavior and demand, and also predictive analysis based on simulating the effect of price variation on consumer behavior · Has resulted in improved volumes, sales and margins by over 2 percent per year, and a 2-point improvement on the Competitiveness Price Index (CPI) · Changes the retailer’s mindset about product pricing by moving from “cost and competitive price-based” pricing to “value-based” pricing, based on understanding consumers

Case Study

Conad del Tirreno is a large cooperative of independent contractors. In the GDO Retail Italian marketplace, Conad del Tirreno is part of a much larger company with more than 5,600 employees and more than 250 stores located in Central Italy (in particular the Tuscany, Lazio and Sardinia regions). Conad del Tirreno is part of the much larger Conad organization, which is the second-largest retail organization in Italy, with over €9 billion in annual turnover, and more than 2,500 stores.

The Need
Conad del Tirreno is part of Conad, the second-largest retail organization in Italy. The retailer was facing increased price competition. The company decided it needed to remove itself from this price reduction spiral, and at the same time improving his competitiveness and price perception by implementing a Price Optimization strategy and execution with the help of a strong solution partner.

The Solution
Conad del Tirreno has implemented IBM Business Partner DemandTec Everyday Price Optimization™ solution to manage prices in a dynamic way by focusing on consumer behavior and demand instead of just on product costs and competitive price. By computing the right price for a product, based on enormous volumes of customer-related data and simulations, Conad del Tirreno can determine the most attractive prices for its products.

What makes it smarter
· Provides a detailed analysis not only of existing customer behavior and demand but also predictive analysis based on simulating the effect of price variation on consumer behavior
· Has resulted in improved volumes, sales and margins by over 2 percent per year, and a 2-point improvement on the Competitiveness Price Index (CPI)
· Changes the retailer’s mindset about product pricing by moving from “cost and competitive price-based” pricing to “value-based” pricing, based on understanding consumers

For more information
Please contact your IBM sales representative or IBM Business Partner. Visit us at: ibm.com/retail

Products and services used

IBM products and services that were used in this case study.

Software:
WebSphere Commerce Enterprise, WebSphere Application Server

Service:
GBS BAO: Advanced Analytics and Optimization, GBS BAO: Enterprise Information Management, IBM Global Services

Legal Information

© Copyright IBM Corporation 2010 IBM Corporation 1 New Orchard Road Armonk, NY 10504 U.S.A. Produced in the United States August 2010 All Rights Reserved IBM, the IBM logo, ibm.com, Global Business Services and WebSphere are trademarks of International Business Machines Corporation, registered in many jurisdictions worldwide. A current list of IBM trademarks is available on the Web at “Copyright and trademark information” at ibm.com/legal/copytrade.shtml Other company, product or service names may be trademarks or service marks of others. The information contained in this documentation is provided for informational purposes only. While efforts were made to verify the completeness and accuracy of the information contained in this documentation, it is provided “as is” without warranty of any kind, express or implied. In addition, this information is based on IBM’s current product plans and strategy, which are subject to change by IBM without notice. IBM shall not be responsible for any damages arising out of the use of, or otherwise related to, this documentation or any other documentation. Nothing contained in this documentation is intended to, nor shall have the effect of, creating any warranties or representations from IBM (or its suppliers or licensors), or altering the terms and conditions of the applicable license agreement governing the use of IBM software.