SUCCESS STORY: FINLAYSON
Finlayson is a traditional Finnish design house, known for their Moomin and Tom of Finland apparel. Finlayson has been testing Priceff’s auto-dynamic pricing service in their web store during 2020. The results have been encouraging: Priceff’s pricing solution was able to increase the revenue of the products included by 20% and volumes by 25% on average.
How Priceff has managed to help Finlayson
Finlayson is offering hundreds of different products to their customers, for which the company needs to determine production volumes and prices, among many other things. The main challenges for Finlayson in pricing include finding optimal prices for all different products and variants. The big number of different products, the manual nature of pricing, and the uncertainty of demand often result in some products selling out too cheaply and too soon, while other products are being left on the shelves of stores and warehouses. That said, Finlayson clearly has a need to implement a solution that is able to find optimal prices for their products, optimising inventory turnover, sales volumes, and profits.
Priceff’s autodynamic pricing yields great results
Finlayson has been testing Priceff’s pricing service for some of their products during 2020. Firstly, sales goals and price intervals, among other parameters, were set on a product level, after which the Priceff algorithm updated the prices according to real-time demand once per day, automatically. The results were truly encouraging. During our second testing period this fall, Priceff’s pricing solution was able to increase the revenue of the products included by 20% and volumes by 25% on average, compared to substitute products. The comparison was made this way, to eliminate the effect of the overall increase in online sales during the fall.
Finlayson has an omnichannel structure – including both a physical and online presence. The test only included products that are being sold online. To be able to roll out the solution fully, including products that are sold in physical stores, some processes will have to be figured out.
How did we get here – The process
Finlayson was the first customer to start using Priceff’s Shopify + plugin which was released in June 2020. The processes were therefore automated, and prices were updated once per day from start.
Instead of setting exact prices for their products, Finlayson let the algorithm make optimal daily price adjustments within pre-defined price intervals. The benefits of Priceff’s solution in Finlayson’s context are very clear; price adjustments are automated, revenue and profits are increased, and inventory turnover is optimised, which leads to less waste. Finlayson’s customers are also gaining from dynamic pricing, via finding products at bargain prices more often.
“There is a lot of potential in dynamic pricing. It can be used to increase inventory turnover, test price elasticity, and increase turnover and profitability”, says Mikko Koponen, CEO, Finlayson.