Founded in 1998, Samkaup is one of the leading grocery retailers in Iceland with more than 25% market share and a cooperative owner structure with thousands of members. The company operates 64 stores across the country, ranging from discount stores to convenience stores, under brands including Nettó, Kjörbúðin, Krambúðin, and Iceland. With a short-term vision to provide easier, more transparent, and more personalized pricing, the company implemented Pricemoov’s next-generation pricing platform.

Hindered by a Manual Price Update Process

Managing and optimizing prices is no small feat for any of the grocery retailers doing business in ultra-competitive Iceland. That task is further complicated when a retailer operates multiple brands across the country and continually contends with new competitors. 

Though Samkaup uses its discount brand as the baseline for prices across all brands, optimizing prices was challenging for the one product manager owning this responsibility. Gísli, Product Manager for Samkaup, regularly tracks competitors’ price movements. When that data is lacking, he targets margins of a certain percentage. Yet this is difficult to manage at scale when prices increase globally and he needs to generate hundreds or even thousands of new prices each day. 

Gisli’s task was challenging due to a manual process that made it time-consuming to incorporate suppliers’ price changes and limited him to 500-600 daily price changes. To define prices, he manually scanned competitor SKUs and reviewed every supplier cost change – of which he received hundreds per day via phone, email, and other means. He then created multiple Excel engines to define prices and adjusted prices on electronic shelf labels over two days. 

Indeed, Gisli needs to spend more time than he has on price changes. “With the challenges that we have been facing over the two last years with record numbers of increases of cost prices from suppliers, managing pricing has become more than a full-time job,” he says.

As if those challenges weren’t enough, some Samkaup category managers were hesitant to incorporate suggested price changes due to a lack of transparency into how those prices had been determined. “We can’t afford any delays in implementing price updates. Delays on even one item can mean a huge loss in mere hours due to supplier cost increases,” he explains.

Digitally Transforming with Pricemoov

When Samkaup decided to modernize its ERP as part of a digital transformation project, it realized it made sense to also enable easier, more responsive daily pricing. “It was hard to dynamically update prices with our manual process and legacy ERP. We realized the opportunity to further modernize the way we price,” Gisli continues. 

After assessing pricing vendors and their solutions, Samkaup singled out Pricemoov. In addition to being able to easily connect Pricemoov with the grocery retailer’s new ERP, the grocery retailer was impressed by Pricemoov’s intuitive platform and features, and its 12-month vision for projected pricing transformation. “We like that Pricemoov is proven in the market and that we could provide input into the company’s planned features. We also appreciate that they were responsive to our unique needs,” he says. 

One critical requirement was for a solution that could ingest prices from six different point-of-sale systems and update prices across seven locations – and on electronic price labels – simultaneously. “Other vendors said they could support this, but only Pricemoov showed it had already done it,” explains Gisli.

Phasing in Price Optimization

As part of its digital transformation journey, Samkaup is creating a centralized hub of product and price data that will be ingested by multiple systems. At the heart of this hub will be Pricemoov. 

Having incorporated its pricing strategy into Pricemoov, Samkaup uses the platform to automate pricing for 70 product categories. It will now move into the next phase of this project by optimizing prices for its B2B business. In the project’s final phase, it will take full advantage of the Pricemoov platform – and shut down the 20 Excel engines Gisli created to track price changes. Ultimately, it will use Pricemoov to manage 20,000 SKUs and 80,000 prices across its four brands. 

As a company focused on driving customer loyalty, Samkaup intends to get more granular by pricing on subcategories. The retailer’s current loyalty platform contains about 70,000 names, making it the largest loyalty program in Iceland after Icelandair. “We are hyper aware of our customers’ price sensitivity and can leverage Pricemoov to stay agile and keep them happy,” says Gisli. 

Saving Time While Driving Loyalty

With Pricemoov, Samkaup eliminates the problems associated with manual pricing. In one instance before Pricemoov was implemented, a supplier had increased its price by 10% but the person monitoring supplier emails was on holiday so Samkaup didn’t see the increase in time. “We missed a huge opportunity and lost money in that situation, and it’s just one of many where things fall through the cracks when you’re manually tracking all this information,” Gisli says. 

Now Samkaup takes all supplier costs into consideration in real time. “Already, Pricemoov is computing over 100,000 price recommendations daily, and automatically updates prices in minutes instead of the 48 hours it took me to handle this previously. In fact, I expect to save an average of half a day every day managing pricing,” he observes.

Samkaup will further measure the impact of Pricemoov by monitoring its margin yield and polling customers on their satisfaction with prices. Through its personalization efforts enabled by Pricemoov, it expects to provide better prices that help drive loyalty and customer retention. 

Enabling Transparency and Reducing Risk

The company is pleased with the transparency Pricemoov enables. “We can easily show everyone at headquarters how pricing recommendations are being determined. This allows more people to understand – and impact – our pricing strategy. Plus, it saves me from responding to hundreds of emails asking how we decided on any given price,” Gisli continues.   

Hand in hand with this, Samkaup has reduced the risk associated with a single person holding the most knowledge about the grocery retailer’s pricing strategy. “Now that we can eliminate our Excel engines and easily onboard people onto Pricemoov, it’s much easier to teach them about pricing. That will reduce the risk by having our pricing business logic centralized and structured. Plus, now we have more opportunities to easily onboard more people to our pricing environment,” he says.

Moreover, other Samkaup employees can easily view price data in Pricemoov. “Employees managing supplier relationships can see, for instance, when a competitor is pricing a certain product lower than us and contact the supplier to negotiate a better price. That enables us to match or beat the competition,” he concludes.