Case Studies Optimizing Pricing to Mitigate the Impact of Tariffs

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	Optimizing Pricing to Mitigate the Impact of Tariffs

Optimizing Pricing to Mitigate the Impact of Tariffs

Technology Category	Analytics & Modeling - Predictive Analytics
Applicable Industries	Retail
Applicable Functions	Business Operation Sales & Marketing
Use Cases	Demand Planning & Forecasting Predictive Replenishment
Services	Data Science Services System Integration
Challenge	A brand/retailer was concerned about the impact of tariffs on their margins. They wanted to understand in which retail channels they could increase prices on specific programs/items without receiving price resistance from customers. The challenge was to identify which items could bear the price increase and which could not, in order to optimize their pricing strategy and maintain profitability. Read More
About Customer	The customer is a large brand/retailer operating in the United States, with a significant presence across multiple retail channels. They are focused on maintaining their market position and profitability amidst changing economic conditions, such as the imposition of tariffs. The company has a diverse product portfolio and aims to leverage data-driven insights to make informed pricing decisions. With over 1,000 employees, the brand/retailer is well-established and seeks to use advanced analytics to navigate complex market dynamics. Read More
Solution	The brand/retailer employed the First Insight solution to test all items that had the potential for price increases. This solution helped them determine which programs/items could bear the price increase and which could not. By leveraging predictive analytics, the brand/retailer was able to segment their retail channels and understand the price sensitivity of their customers. This approach allowed them to make data-driven decisions on pricing strategies, ensuring that they could maximize margins without alienating their customer base. Read More Log in to view content
Contents

Technology Category

Analytics & Modeling - Predictive Analytics

Applicable Industries

Retail

Applicable Functions

Business Operation

Sales & Marketing

Use Cases

Demand Planning & Forecasting

Predictive Replenishment

Services

Data Science Services

System Integration

Challenge

A brand/retailer was concerned about the impact of tariffs on their margins. They wanted to understand in which retail channels they could increase prices on specific programs/items without receiving price resistance from customers. The challenge was to identify which items could bear the price increase and which could not, in order to optimize their pricing strategy and maintain profitability.

About Customer

The customer is a large brand/retailer operating in the United States, with a significant presence across multiple retail channels. They are focused on maintaining their market position and profitability amidst changing economic conditions, such as the imposition of tariffs. The company has a diverse product portfolio and aims to leverage data-driven insights to make informed pricing decisions. With over 1,000 employees, the brand/retailer is well-established and seeks to use advanced analytics to navigate complex market dynamics.

Solution

The brand/retailer employed the First Insight solution to test all items that had the potential for price increases. This solution helped them determine which programs/items could bear the price increase and which could not. By leveraging predictive analytics, the brand/retailer was able to segment their retail channels and understand the price sensitivity of their customers. This approach allowed them to make data-driven decisions on pricing strategies, ensuring that they could maximize margins without alienating their customer base.

Impact #1	The brand/retailer utilized segmentation by retail channel to understand which items could absorb the price increases and generate additional margin for the business.
Impact #2	They were able to identify items that could not absorb the price increase without resistance, allowing them to maintain unit sale levels in those channels.
Impact #3	The data-driven approach provided by the First Insight solution enabled the brand/retailer to make informed pricing decisions, balancing margin optimization with customer satisfaction.

Impact #1

The brand/retailer utilized segmentation by retail channel to understand which items could absorb the price increases and generate additional margin for the business.

Impact #2

They were able to identify items that could not absorb the price increase without resistance, allowing them to maintain unit sale levels in those channels.

Impact #3

The data-driven approach provided by the First Insight solution enabled the brand/retailer to make informed pricing decisions, balancing margin optimization with customer satisfaction.

Benefit #1	The brand/retailer was able to markup all 5 items in retail channel #1, generating more margin than anticipated in this channel.
Benefit #2	They maintained current prices on all 5 items in retail channel #2, taking a margin hit to preserve unit sale levels.

Benefit #1

The brand/retailer was able to markup all 5 items in retail channel #1, generating more margin than anticipated in this channel.

Benefit #2

They maintained current prices on all 5 items in retail channel #2, taking a margin hit to preserve unit sale levels.

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Overview

Optimizing Pricing to Mitigate the Impact of Tariffs

Operational Impact

Quantitative Benefit