Price Optimization

Written By Sarah Kronemeyer

Improved conversion rates and grew online sales by taking a formula-based approach to price optimization and testing customer responsiveness.

48%

Increase in Conversion Rate

108%

Increase in Sales

Client

A leading multi-channel retailer of home goods within the United States looking to expand into the B2C retail marketplace.

Challenge

Client leadership recognized the need to improve conversion rates in the newly launched retail store. The marketplace was extremely competitive with big-box retailers dominating the field. As a result, the customer was extremely price sensitive. They needed to optimize both product and shipping pricing in order to maximize customer conversions.

Solution

Gild Group provided industry expertise and led discovery activities, market studies and change management to ensure successful implementation of the new pricing structure.

Accomplishments

  • Identified shipping cost to be the root cause of the low transaction rate

  • Reviewed infrastructure and to identify how we were able to adjust the shipping model without impacting bottom line profitability

  • Created pricing model and incremental shipping rules

  • Supported the client through implementation and roll-out

  • Provided guidance to manage potential customer impacts

Results

Within 60 days of implementation, sales increased by 108%, add to cart rates increased by 40%, and the conversion rate increased 48%.

Adjustments to the shipping model and pricing structure meant that the average profit margin stayed consistent. In essence, we crafted the perception of maximum value to the customer without sacrificing the client’s margin.

Sarah Kronemeyer
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