Cases

Price optimization for a company in the retail sector

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varejo alimentício ()

Challenge

Identify the best portfolio-level price combination for all products, with the goal of increasing profit margin. This is a complex task that requires a meticulous approach to balance pricing and demand.

Scope

The analysis focuses on selecting the prices of products in premium stores, located in luxury neighborhoods, belonging to a giant in the food retail industry. The choice of prices must reflect the exclusivity and quality of the products offered.

Solution

Price optimization is performed according to the market strategy, using a sophisticated causal model. This model combines demand forecasting with the estimation of cross-price elasticities, allowing for precise price adjustments to achieve the desired profit margin.

Result

The successful implementation of this approach resulted in a significant 6% increase in profit margin compared to mirror stores. This result highlights the effectiveness of the strategy and the potential for application in other areas of the business.

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