Customer case Östenssons
Centralized assortment planning and pricing strategy increased efficiency and brought significant growth to sales and gross margin
With the help of Analyse² Assortment Planning and Pricing solutions, Swedish Retail chain Östenssons increased their efficiency in managing and planning product assortment across their stores. By having the right assortment in each of their stores at the right price, they were able to increase the sales over 5% and gross margin over 11% in selected product groups.
Having a clear product strategy allowed managing the assortment in a centralized way, while still being able to meet and react to the local demand. A² solutions also helped Östenssons to implement the chosen pricing strategy.
Before starting the cooperation with Analyse², Östenssons had identified product pricing as a pain point since it required lot of manual work and was lacking efficiency. After getting familiar with Analyse² solutions, it was clear that also assortment planning would benefit from a clear product group strategy along with proper assortment planning tools. Having a wide assortment is essential part of Östenssons positioning, but rather than having wide assortment in general, more important was to have the right assortment in each of their stores at the right price.
Östenssons is a Swedish retail store chain in Western Sweden. They are specialized in providing high quality food products along with superior customer service. An essential part of good customer service for Östenssons is to have a wide product assortment.
Evaluating the solution
Before implementing A² Assortment Planning and Pricing solutions across the complete product assortment, Östenssons and Analyse² agreed on running a solution pilot in selected product categories, which represented 20% of Östenssons’ complete product assortment. The pilot duration was six weeks and during this time every pricing and assortment decision in these defined categories were supported by A² Planning tools.
During the pilot Östenssons wanted to reach sales and gross margin targets but also verify that with A² tools they could efficiently and centrally manage their product but also be able to meet the local demand and adjust the assortment in each of their stores accordingly. For pricing this meant setting a clear pricing strategy for each of the store type.
Through the pilot Östenssons wanted to see a clear increase both in the sales figures and in the gross margin of the selected product groups. The target was to increase sales by 5%, which was reached and exceeded. For gross margin the target was 11% increase, which was also far exceeded.
The pilot confirmed that A² solutions can help Östenssons to efficiently manage the product assortment in a centralized way and at the same time be able meet the local demand. The tool also allowed Östenssons to fully utilize their shelf space since the data about available shelf space per category was included to the tool.