1. Client Overview

• Industry: Department Store Retail – Apparel, Beauty, Homewares, Electrical
• Business Size: $1.1B–$1.4B revenue, national store network and e-commerce channel
• Location: Australia-wide, headquartered in Sydney
• Client Context:
  David Jones is a premium department store retailer facing intense margin pressure and consumer fragmentation. Despite iconic brand equity, the retailer suffers from overly complex SKU proliferation, inconsistent markdown execution, and ineffective product/price architecture. The merchandising and pricing teams lacked a unified approach, with tactical discounting eroding brand and margin strength.

2. Challenge / Problem

• Symptoms Observed:
  
  • Unstructured markdown strategy reliant on blanket “% off” promotions
  • Excessive SKU and brand proliferation in key categories (e.g., handbags, men’s polo, small appliances)
  • Limited price pack architecture (Budget/Good/Better/Best) to guide assortment or pricing decisions
  • Margin leakage due to poor in-store execution, pricing inconsistencies and undertrained staff
  • Lack of data-led promotional design or elasticity analysis
• Strategic Impact:
  
  • Operating margin erosion below retail peers (e.g., Myer)
  • High complexity without corresponding commercial return
  • Unclear pricing strategy diluted by vendor-driven promotions
• Executive Commentary:
  “We’re doing markdowns to chase volume, but we’re not clear on which products need it—and which ones don’t.”

3. Objectives of the Engagement

• Identify immediate gross margin uplift opportunities through SKU, pricing, and promotional reset
• Rationalise brand and SKU assortment using commercial logic and pricing architecture
• Embed discipline in pricing strategy, governance, and margin accountability
• Strengthen pricing execution across digital and store networks
• Align pricing strategy with retail format, shopper missions, and elasticity of demand

4. Our Approach

• Phase 1: Pricing Capability Assessment
  
  • Surveyed 65+ staff across pricing, buying, and store operations
  • Measured against a retail pricing capability framework across 11 core domains
  • Found wide disparities in internal view of pricing maturity—scores ranged from 11% to 100% on core capabilities such as markdown execution
• Phase 2: Diagnostic Roadmap
  
  • Identified five key margin expansion themes and quick wins
  • Benchmarked against competitors (notably Myer) on SKU density, pricing architecture, and promotional mix
  • Conducted pricing analytics on SKU variant proliferation and average price differential by category
• Phase 3: Quick Wins Execution Planning
  
  • Developed pricing guardrails and value communication tools
  • Proposed replatforming of pricing approvals and markdown management workflows
  • Created SKU cull models and pricing ladders for high-impact categories

5. Key Actions Taken

6. Results Achieved (Within 10–12 Weeks)

7. Client Feedback

“The diagnostic showed us how to reduce complexity while improving profitability. We no longer guess at markdowns or promotional depth—our buyers and pricing team now work from the same playbook.”
— General Manager, Merchandise Planning, David Jones

8. What This Means for Similar Companies

Department store retailing has unique pricing challenges—long seasonal cycles, brand influence, fragmented formats, and complex promotions. David Jones’ diagnostic proves that margin can be recovered not through sweeping cost cuts or blanket sales, but through intelligent pricing design, SKU focus, and promotional discipline.

9. Contact Us

To discuss how your business could unlock 200 to 900 basis points of margin improvement through pricing strategy reset and execution uplift, contact: