Portugal’s largest retailer extends dunnhumby price optimisation across formats and regions

Dunnhumby, a leading customer science company, has announced that Sonae has agreed to extend its PriceStrat price optimisation software license to new retail formats and geographic regions around the world. The largest retailer in Portugal, Sonae operates a mix of multi-format food and non-food chains, with more than 1,425 locations under a variety of brand names. The company has trusted PriceStrat since 2008 to help build and maintain its competitive price position in the grocery market.

In addition to extending its current use in Portugal, this agreement enables Sonae to use PriceStrat to manage and enforce compliance with its pricing strategy as the company expands in new geographic regions such as Spain, America, Africa, and the Middle East. Sonae will also implement PriceStrat at its non-food formats, including its growing sports equipment and clothing retail chain.

Sonae chose PriceStrat, developed by KSS Retail, in part because of the software’s highly sophisticated rules-management capabilities, according to Goncalo Peixoto Fernandes, Commercial Director for IT. In real time, Sonae analysts can test the impact of a wide variety of constraints, such as competitor pricing rules, brand and size-parity rules, maximum/minimum price differentials, and supplier cost changes. Furthermore, PriceStrat enables Sonae to identify where rules may be relaxed to achieve more favorable outcomes. By creating and automating the enforcement of these advanced pricing rules, Sonae has been able to:

  • Improve pricing logic and consistency on store shelves, which strengthens overall customer perception of prices and brand value
  • Tailor prices by store type and geography to maximise their relevance to customers
  • Enhance its competitive positioning while maximising gross margin and other financial objectives

“Competitive pricing is highly transparent to customers today. It’s important to Sonae’s corporate and brand strategy that shoppers know us as the overall low price leader,” Fernandes said. “PriceStrat is a pivotal tool for our category managers and buyers, giving us the visibility and control we need to maintain and fine-tune our pricing, so that we continue to win in our markets and on the products that matter most to our shoppers.”

“It’s clear that retailers like Sonae are realising significant benefit and return from their investment in PriceStrat and see price optimisation as a strategic priority in helping them demonstrate value to shoppers,” said Howard Langer, Managing Director of Price & Promotions practice for dunnhumby. “This new opportunity re-affirms our belief in working collaboratively with clients and empowering them to make smart, data-driven decisions based on proven science – choices that ultimately lead to both shopper loyalty and bottom-line improvements. We look forward to extending this success story across the combined Sonae organisation.”