A chain of retail stores based in South, was suffering from low profitability and was unable to sustain the costs to break even though the store reached the optimum level of walk-ins.
Retailer was confused and stuck at crossroads and was about to take a decision on closure of few branchesSolution
Robotic Risk Bots were implemented by Tectalik to identify accurately, sales margins and summarized them exceptions as:
• Salesman offering maximum discounts
• Product categories with low margins
• Vendors supplying products at higher costs
Price benchmarking with competitors was also conducted to verify the claims of the sales staff about high discounts also proved that the market was offering at higher prices.Benefits:
Systematic correction of pricing to become competitive to industry was the first step based on outcomes from narrowed categories identified from Bots.
Training salesman to control discounts as exception instead of norm also improved margins significantly with very minimal impact on sales.
Negotiation with Vendors to improve margins at same of better payment terms added few more points to profitability.
In effect this improved store performances and cash flows significantly and profitability by 25%