Before Bloomington, Minn.-based Holiday Stationstores changed course for its 500 units, the retailer relied on its category managers to set prices based on whatever information or intuition they could get their hands on.
After implementing the software from Austin, Texas-based Revionics and adjusting practices, profit margins have improved at 400 Holiday convenience stores in 10 states, according to the company.
Click through for four changes Holiday Stationstores implemented to turn around its pricing strategy …
1. Sharing the load
Holiday Stationstores scrapped its old model that leaned on category managers for pricing strategy and spread the responsibility with a dedicated pricing team. This process helped lead to more informed pricing decisions and took a weight off of the company’s category managers.
In the new system, the pricing analyst filters all price change recommendations, giving the category managers a more focused list of options that has already been vetted. “So all of the heavy lifting is really done by the pricing team, which definitely simplifies the process for the category managers,” said Dean Solyntjes, director of pricing and business support for Holiday Stationstores.
2. Flexible zone pricing
Transport costs aren’t the only factor influencing zone groups at Holiday Stationstores. Holiday designates different zones for different products to reach optimal prices, even in franchise locations.
Franchise owners determine their own store zone assignments, but any price change recommendations from the corporate pricing team go to each of the franchise stores, giving franchisees access to the pricing team’s analysis while making their decisions.
3. Creative discount strategies
During the implementation of the new process, Holiday Stationstores worked with Revionics to develop a tiered pricing system that Revionics has since rolled into its standard price solution.
“An example of our tiered pricing is ‘buy one for $1.69 or buy two for $3.’ It is somewhat different than the grocery model where you could buy a single item at the multiples price,” said Solyntjes. “In our case, the tiered pricing means you would have to buy that second item to get the discount.”
4. Follow the data
The new pricing strategy and software implementation from Revionics gave Holiday Stationstores a better view of a number of important pricing factors, including shopper price sensitivity, competitive price positions, cost changes, seasonality and more. These fact-based insights allowed the retailer to more easily influence profitability, competitiveness and demand.
“While the previous process was somewhat reactive, these days pricing decisions are made based on facts and not just on intuition,” said Solyntjes.