Cruising to Growth: Uncovering £25 Million in Potential Lost Revenue
Partnering with an international duty free retailer, QuantSpark identified almost £25 million in revenue at risk within its cruise division caused by historical pricing complexities and conflicts QuantSpark provided the tools necessary for the retailer to protect its margins for future growth.
Executive Summary
QuantSpark uncovered over 120,000 pricing conflicts, equivalent to 10% of all annual sales.
Focused, data-driven analysis maximized results. The retailer now has tools to improve pricing accuracy, governance, margins and revenue.
Data-driven pricing optimisation is an effective way to drive margin and revenue growth through analytics.
The Challenge: Pinpointing Falling Margins
QuantSpark worked with a leading international duty free retailer whose cruise division operates in over 100 shops across 17 major cruise lines. Their stores sell everything from headache tablets to luxury watches, catering to a With 100,000 unique products and prices fluctuating across different ships, regions and shipping lanes, keeping on top of accurate pricing is a major challenge.
When the retailer noticed their margins falling but was unable to pinpoint the cause, they called on QuantSpark for help.
The Solution: Applying targeted price conflict detection methodologies
Our analytics team began by comprehensively mapping the retailer’s pricing processes to understand how inconsistencies could occur. This analysis revealed vulnerabilities at multiple touchpoints where human error could be introduced.
For example, sales prices were converted between the four trading currencies using manual Excel calculations. With many similar manual processes, the widespread existence of 'pricing conflicts' was hypothesised.
To identify and prioritize the most impactful conflicts, QuantSpark focused on two types:
Margin-based conflicts: Where sales prices didn't align with the target margin percentage based on known purchase costs
Currency conflicts: Where prices for the same product did not line up across the four trading currencies
The Impact: Clawing back suboptimal prices
By applying these targeted detection methodologies, our data scientists uncovered over 120,000 pricing conflicts representing £25 million in revenue at risk. We identified margin conflicts on 6,000 items and currency conflicts on 114,000 items.
To help the retailed capture this revenue, QuantSpark:
Identified the 300 highest risk products, which the buying team could then use their expertise to manually manually action
Designed automated price recommendations for the remaining lower risk items
Configured a conflict detection logic so that the retailer could monitor pricing accuracy going forward
With a total business revenue around £320 million, our analysis revealed up to 10% of the retailer’s sales were at risk from suboptimal pricing. However, given the retailer operates on 50-60% margins, fixing these conflicts could recover around 20% of their total margin.
This project showcases QuantSpark’s ability to tackle pricing complexity and deliver high impact for global retailers. By taking a targeted, data-driven approach, we maximised results with limited time and resources.
The retailer now has the tools and knowledge to significantly improve pricing governance, margins, and ultimately revenues. For businesses struggling with pricing accuracy, QuantSpark’s analytics expertise can uncover hidden revenue opportunities.
Get in touch
Are you looking for a team with deep expertise in advanced analytics and modelling techniques to drive value in your business? We can support you.
Related areas of QuantSpark expertise
Similar Case Studies
