Diverse Economies, Diverse Paths to Price Optimization: A Latin American Tale

Diverse Economies, Diverse Paths to Price Optimization: A Latin American Tale
June 17, 2016 Carlos Rodriguez - Vice President, LATAM Sales

price optimization workshop monterrey

On the heels of our sold-out workshop in Monterrey on “Advanced Strategies for Profit Optimization,” I am still struck the variety of leading retailers in the room – more than 35 people from 13 of Mexico’s most innovative retail brands. They represent a range of retail sectors, with varying degrees of optimization maturity, but they all share a passionate interest in sharpening their brand and price image, better connecting with customers and delivering measurable business results.

On a broader scale, as Revionics continues to engage with leading retailers across Latin America, I am seeing first-hand the full diversity of economic environments – from robust, prosperous regions to those beset with galloping inflation, wary consumers and pervasive uncertainty. But it’s interesting how across all the different environments retailers are increasingly turning to automated price, promotion and markdown optimization to survive and thrive.

Meanwhile in Bolivia, which has the highest projected GDP growth rate in South America for 2016, nationwide drugstore giant Farmacorp has adopted price optimization to help the company scale for aggressive growth, conduct sophisticated customer analytics to understand what truly matters to customers in terms of value, competitive pricing, and cross-channel experience. With their price optimization well underway, they are finding that they are able to consistently deliver – or even exceed – quarterly targets for margins and profits. Farmacorp CIO Andres Valdivieso delivered a riveting discussion of their price optimization journey at the Monterrey workshop – I saw fantastic engagement across the whole room as retailers heard the story straight from a C-level peer.

In Brazil, which has been hard-hit by the soft commodities market and by accelerating inflation, consumers are growing ever more cost-conscious. One of our customers there is using advanced Revionics analytical services and price and promotion optimization to ensure that they accurately identify and price key value items (KVIs), identify and cluster outlets that can be price zoned to better map to the needs of specific customer sets, and re-optimize more quickly to keep pace with customer and competitor shifts in the face of rapid inflation.

A customer in yet another Latin American country with steady, moderate growth is applying our sophisticated Price Optimization analytics to filter the consumer demand signal from the noise to support a disciplined and measurable approach to appealing to cost-conscious shoppers while meeting bottom-line business goals.

It’s gratifying to see accelerating business process and metrics sophistication, more strategic omni-channel approaches and customer-centric executive philosophies gain traction in Latin America. It’s gratifying to see the level of interest, turnout and engagement at our Monterrey workshop – which may lead to more such events in LATAM! This fascinating and diverse region presents my team with new surprises and challenges every day – which is why it’s so rewarding to focus on this area. And it’s a very great honor to help innovative, far-sighted retail executives address their specific market and business environments through high-impact, high-ROI use of price, promotion and markdown optimization to drive market leadership and customer loyalty.