Toom Baumarkt is to manage its pricing with software from Aptos subsidiary Revionics. The DIY banner operation of Rewe Group has opted for the US-based specialist provider’s artificial intelligence-based platform. Its base price and markdown applications shall help Toom to introduce more effective and efficient pricing practices. With the move, the DIY store operator aims to improve perception of its prices among customers and promote customer loyalty and further growth.
With more than 300 DIY stores and a web shop, Toom is one of Germany’s leading DYI retailers. It offers its customers a wide range of products and services. “Price and value remain key drivers for consumers when choosing where to shop,” says Dr Markus Karger, Senior Pricing Expert and Project Lead at Toom.
In addition to improved customer loyalty and price perception, Toom also expects to make pricing processes more efficient and scalable. Employees responsible should be given more time to concentrate on strategic pricing initiatives. “Given our high number of diverse DIY and gardening assortments, various campaigns and promotions, and our customer card, pricing is as complex as customers’ decision-making processes,” explains Dr Markus Karger, adding that a retailer with a large brick-and-mortar presence, a growing digital business and a range of more than 100,000 items needs more automation in pricing.
AI promises precise forecasts
Revionics’ AI models promise to accurately forecast changes in demand. The software observes market changes and determines price sensitivity of buyers as well as price elasticity of individual products. It uses this information to determine the optimum daily price and price markdowns. Recommended prices should be optimally aligned with the retailer’s individual goals and shopping behaviour and purchasing patterns of its customers.
The platform allows to optimise prices at all levels. In addition to product level, this can – as the provider states – include key value item (KVI) groups, zones or categories. In addition, Revionics offers comprehensive reporting that promises insights into the effects and added value of price changes.
