Balsam Brands has unique price challenges given the strong seasonality of its business.
The California-based online retailer of luxury artificial Christmas trees and seasonal decoration, whose brands include the popular Balsam Hilll, earns more than $200 million in annual sales, with 80% happening during the last three months of the year. As a result, it is critical for Balsam Brands to hit its sellout goals and protect bottom-line metrics.
To manage seasonal sellout while protecting gross margin and growing revenue, Balsam Brands is leveraging the artificial intelligence (AI)-powered Competera pricing platform. The company utilizes demand-driven price reduction recommendations created by Competera's trainable AI models.
Balsam Brands has leveraged Competera functionality to move past previously existing key challenges, which included a labor-intensive repricing process that took 12 hours per week, as well as the lack of a unified tool to manage prices based on market trends.
Utilizing a customized ERP platform, Balsam Brands can automate weekly repricing, carry out price adjustments following the sales plan, and make data-driven pricing decisions. To make the best offer to its customers, Balsam Brands can consider a variety of pricing and non-pricing factors, such as website analytics and market trends, the latest sales data, price ladders, smart business constraints, and price rounding rules.
During the 2020 business season, Competera's AI models generated 24,000 price reduction recommendations for the retailer. These were based on its historical transactional data, smart business constraints, pricing architecture, inventory availability, and other essential data points. As a result, Balsam Brands decreased time for repricing by 50% and reached its set business goals by generating over 3.5% of revenue and over 3% of gross margin.
"As the business was scaling, it was important for us to base our pricing decisions on market trends, website analytics, and other crucial data points that a pricing manager can hardly embrace all at once,” said Joyce Lin, senior e-commerce business manager at Balsam Brands. “Competera's smart algorithms made our price management data-powered and proactive and saved the team 50% of the time from routine tasks. Competera has shown how AI is revolutionizing the traditional pricing processes and strategies, so we look forward to adopting the technology for other regions."