Quantzig’s Price Point Optimization Assists a Food Retail Client in Increasing Profitability Levels

Quantzig’s Price Point Optimization Assists a Food Retail Client in Increasing Profitability Levels

The client: A food retail company, Size: >$2.2 billion in revenue, Area of engagement: Price point optimization

The food retail sector is one of the largest industries in the US and the firms in this space are preparing to expand their consumer base and increase their foothold in the market. Typically, food retail establishments include outlets that serve food outside the home such as restaurants, cafes, takeaways, and catering and vending companies. Food retail companies across the globe are planning on devising practical measures to improve their offerings and meet consumer demands due to the rising consumer expectations. Additionally, the ever-evolving customer demands, favorable demographics, rapid urbanization, increase in disposable income, changing lifestyles, and food habits are driving the growth of this industry. However, the growth of the food retail industry is subjected to certain factors. These factors include:

  • Stringent government regulations: Today, government authorities are facing pressures to devise quality measures and provide safe and reliable food services to customers, as they have become conscious about their health outcomes. Additionally, government bodies across the globe have also made it a mandate to ensure safety in the food products offered due to the increasing instances of food allergies.
  • Impact of digitization: Firms within the food retail space are looking for promising ways to engage with customers and open new revenue streams due to the growth of numerous e-retail platforms. Additionally, the fluctuating preferences of customers are compelling food retail firms to offer ease and convenience in their offerings.

These factors are compelling firms operating in the food retail space to leverage the use of price optimization strategies. Price optimization solutions are used to combine data across different data sets with information and inventory levels to recommend robust pricing strategies to enhance the current profit margins. Price optimizing solutions also help firms calculate the demand for products at different intervals and scales.QZ- Request free proposalFurthermore, these solutions also assist firms in forecasting demand, developing robust pricing and promotion strategies, and subsequently, improve customer satisfaction levels.

The Business Challenge

Total food retail sales in the US amounted to about 5.32 trillion dollars in 2015.

The client, a leading food retail giant in the US with business operations spread across the wanted to collect historical data including the competitor’s prices, company’s pricing and promotions, and economic conditions. The client also wanted to understand the impact of price differentiation across customer segments and devise a robust pricing strategy to enhance customer satisfaction. Additionally, they wanted to formulate better initial pricing, discount pricing, and promotional pricing strategies.

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The Solution and the Business Impact

The food retail client was able to set temporary prices for companies to spur sales for items with longer life cycles with the help of Quantzig’s price optimization solution. The client also gained actionable insights into the customer buying patterns in real-time. This helped them devise strategic ways to retain their most profitable customers. Furthermore, the engagement also helped the client define profitability levels and understand the sensitivity of customers.

Price Optimization Solution Predictive Insights

With the help of Quantzig’s price optimization solution, the food retail client identified customer segments with a higher probability of cancellation. Additionally, the client gained a detailed analysis of the market in which the company operates by creating a competitive management analysis. This helped them forecast future renewal rates for their clients.


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