Owning 165 stores in a region spanning Wisconsin, Minnesota and Illinois, Roundy’s Supermarkets offers superior grocery products and services. The company’s annual revenue tops $4 billion. Its banner brand names include Pick ’n Save, Copps, Rainbow, Metro Market and Mariano’s, each with varying degrees of market penetration, some capturing more than 50% of market share.
Roundy’s wanted to increase sales and margins, while improving price perception. Faced with growing competitive pressures, particularly from Wal-Mart stores and other supercenters and conventional grocers, Roundy’s knew it needed a strong pricing strategy. Furthermore, the strategy had to be in tune with an increasingly complex, informed and empowered consumer.
After an in-depth industry search for the right solution, Roundy’s chose the Revionics® Price Optimization solution. Revionics’ Software-as-a-Service (SaaS) model helped Roundy’s avoid costly and timely implementation scenarios, while its intuitive user interface offered transparency and speed. Best of all, baked into the Revionics solution is its well-honed pricing science.
“We wanted improved price integrity, consistency and to ensure we always had data-driven pricing decisions,” said Jason Benish, Roundy’s Vice President of Pricing and Strategic Initiatives. He noted that the system was easy to use, understand and navigate—needing only three months to implement and yielding solid results in the first year.
After adopting the Revionics Price Optimization solution 2 years ago, Roundy’s never looked back. Gross profit margins increased across the board and ROI was “significant”. Price optimization showed positive results in all 10 categories at test and control stores during the initial implementation, and particularly drove results in the candy category, where gross margin, unit sales and dollar sales all increased.
Roundy’s has abandoned its cumbersome spreadsheet-based pricing strategy, freeing staff for in-depth analysis and strategic projects. In addition, Roundy’s can now closely monitor pricing and customer demand, with weekly price recommendations provided by the Revionics’ technology.
Because Revionics’ solution is able to optimize all 50,000 of Roundy’s SKUs, something not possible with a spreadsheet, Roundy’s is also now able to easily optimize all SKUs and identify low hanging fruit—products that could easily offer margin improvements.
Roundy’s also took advantage of Revionics® Advanced Analytics, Key Value Item (KVI) Analysis and Store Cluster Analysis. Tapping into two years worth of data, Roundy’s used demand-based science and shopper insights to identify their KVIs and pinpoint the optimal number of store price zones. This enabled them to zone beyond a geographical basis and reduce the number of price zones by 30% with improved efficacy of pricing.
Roundy’s uses Revionics software for all stores, all categories except perishables, which are coming on board soon. Next up, Roundy’s plans to team up with Revionics to further integrate its shoppers’ buying behaviors into its pricing strategy. Revionics® Social Commerce and Revionics® Promotion Optimization solutions are also on the horizon for Roundy’s.
To learn more about the benefits Roundy's has obtained through leveraging Revionics Price Optimization solution, download Roundy's and Revionic's NRF presentation below, or click here to view the Supermarket News article written about the solution: Roundy’s Sees ROI in Price Optimization