City Farmers Drives Stronger Value for Its Customers While Increasing Gross Profits with Revionics® Life Cycle Price Optimization Solutions


City Farmers combines the provision of pet supplies with garden and pool products, providing everything a customer could need in their backyard. Founded in 1991, in Western Australia, Australia, on the idea of selling bulk pet, garden and pool supplies, the brand has enjoyed rapid growth in 2012 and plans to open 10 more stores in 2013.

City Farmers Managing Director, Clayton Hollingsworth, strongly believes that adopting effective pricing strategies should be one of the highest priorities for a retail company. Ensuring you are offering the right price, at the right time, to the right customer can drive true value for customers while increasing profits. If you don’t have an effective pricing strategy, or it’s implemented inconsistently, it can scare customers away, damage your brand and negatively impact your profits.


After an in-depth review of City Farmers’ pricing strategy in early 2012, Hollingsworth and his team came to the conclusion that pricing decisions were being made based on a series of assumptions, traditions and pure gut instinct and that the company’s methodology in this area had to change.

Knowing that pricing done right is a complex endeavor, Hollingsworth and his team needed to find a more science-based, data-driven approach to their pricing and promotion strategies that was proven, manageable, measurable and most importantly created a strong value proposition for its customers.


After a comprehensive industry search, City Farmers decided to partner with Revionics and leverage Revionics® Life Cycle Price Optimization solutions, which are offered as a Software-as-a-Service (SaaS) and allows City Farmers 24/7 online access, an easy user interface, data analysis at the item/store level and makes pricing and promotion recommendations. Another strong benefit is that the demand models are automatically updated weekly for optimal accuracy and results and what-if simulations can be done in real-time.

“Partnering with Revionics was an easy decision,” commented Hollingsworth. “As a data-driven company we needed a more fact and science-based approach to our pricing and promotion strategies that would create a stronger value proposition for our customers. Furthermore, we were impressed with how the Revionics’ platform is a ‘dynamic learner’ and is essentially the brains of the operation – the more data you throw at it, the smarter it becomes.”


City Farmers started implementing Revionics pricing recommendations quickly and they have been very pleased with the results. The benefits they have achieved include:

–Powerful Transparency: City Farmers now has complete transparency over critical elements such as price elasticity and Key Value Items (KVIs). The solution helped them figure out that out of the 400 products they originally thought were their KVIs, only 89 products were truly KVIs. This powerful transparency and information helped them more effectively price their stock. 

–Driving Stronger Value: The solution’s recommendations did not have City Farmers change all the pricing across the board, instead it had them implement regular price updates in both directions (up and down), which allowed them to clear more volume while powering higher profits. This also resulted in their customers’ perceiving their most popular products as having even stronger value.

–Higher Gross Profits: Since the implementation of Revionics’ solution, City Farmers’ gross profits have increased by several percentage points.

City Farmers is very pleased with the results achieved thus far, but are even more excited about the future results they will receive from leveraging additional solutions from Revionics. Moving forward, Hollingsworth plans to improve their promotions with Revionics’ solutions in areas such as EDMs, print catalogues and segmented offers.

A quote that Hollingsworth likes to cite:

“There may be a retail sector for which price/value leadership is not one of the two most important determinants of store choice...I haven't found it yet.”

-Douglas Tigert
Professor of Retail Marketing
(From Tigert’s 22 Tiny Retailing Tidbits)


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