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Case Studies

Compete on price with much larger competitors

Data-led Pricing Wins The Price War

A growing retailer lacked the purchasing power to compete on price with its larger competitors. When a pricing war broke out, the retailer engaged dunnhumby to help determine what kind of response would be most attractive to its customers.

The insight

Some helpful insights were gained following a customer review by dunnhumby:

  • Loyalty levels were lowest amongst the company’s price-sensitive customers
  • Price was the #1 cause for customer dissatisfaction
  • The top products most important to price-sensitive customers were identified

The action

With a better understanding of its customers, the retailer took the following actions to help survive the price war and find a way to keep delighting its customers:

  1. Identified the top products for price-sensitive customers
  2. Lowered the prices of these products to match the competition
  3. Communicated these prices to customers on the shelf

The results

The retailer not only survived the price war, it was also able to increase sales and grow loyalty:

  • Total store sales and units from price-sensitive customers +1-3%
  • Increased number of loyal customers shopping