| Customer: A privately labeled office supplies company | Profile: The customer sells office supplies via digital channels & online 3rd party marketplaces to customers in a variety of industries across the US. |
| Industry: Retail office equipment | |
| Services: Machine Learning |
Business Need
The office supplies company relied on a traditional Excel formula-based logic to generate daily prices for SKUs based on the previous day’s selling price and profit incurred. But as business needs grew, it wanted to leverage statistical analytics as well as Machine Learning algorithms to decode the historical price vs. profit trend.
Using statistical methods, the customer wanted to achieve a convergence relationship between price vs. profit and set SKUs selling price to maximize profit. In addition, it also wanted to keep this process automated and ready before the start of business hours.
Solution and Approach
To meet the customer’s requirement, Synoptek first developed a central database to sync data from different digital marketplaces. Once the database was set up, we
- Conducted exploratory data analysis on 1 year of data to uncover trends between price and profit for all SKUs.
- Worked on removing noise, structuring, and cleaning data, and developing missing data points for training the analytical model.
- Used regression models such as logistic regression, decision trees, and gradient boosting machine (GBM) to train the models.
- Levered the Random Forest regressor algorithm to combine learning methods with the decision tree framework to drive the best results.
- Built an analytical model to predict SKU-wise optimal price to gain maximum profit.
- Created outcomes to best fit the client’s needs for understanding the results which can be used for setting product pricing.
Business Benefits
With the dynamic pricing implementation, the office supplies company can:
- Reduce manual efforts of extracting data from different digital marketplace portals.
- Open the horizon of opportunity to work with different prices even in different periods in a single day.
- Increase overall SKU-wise profit in month-on-month results.
- Easily view results in Excel format with supporting price vs. profit graphs for each SKU.
The automated solution built by Synoptek has resulted in
“We have enjoyed working with Synoptek the past several months and we appreciate the hard work put into this pricing algorithm solution and the hours spent. The automated solution helps us save approximately 3 hours every day and allows our analysts to set optimum prices to maximize profit for each SKU.”
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