Context: about Decathlon

Decathlon is the largest sporting goods retailer in the world, with 2,080 stores in 56 countries. The French multinational manages the research, design, production, logistics and distribution of its products in-house under more than 20 brands. In addition to selling its own goods, Decathlon carries many popular third-party products.

Decathlon is best known for its relatively inexpensive yet quality products, competing with an Every Day Low Price (EDLP). As promotions and special sales had historically not been used, its approach to pricing was relatively simple.

However, pricing strategy became more complex as Decathlon entered more and more markets, each with a drastically different definition of low prices. This reality, together with changes in its relationship with third-party brands, required a pricing capability review.

Additional critical problems stood in his way:

1. Strict brand guidelines for pricing: Decathlon competes on price, so they have precise rules for pricing and markdowns. This limits the opportunities for efficiency gains, making it unclear whether an integrated solution would even be possible.
2. Implementation costs: Overhauling the entire system would require a high investment vis-à-vis financial costs and complexity of implementation. Ben Seghir was not convinced the overall opportunity would deliver sufficient ROI to justify changes.
3. Sensitive data: To get significant gains, Decathlon would have to give any potential partner full access to their sensitive internal data. Ben Seghir needed a company he could trust to respect confidentiality and work with the in-house team as partners.

Decathlon partnered with Evo to launch the Juste Prix programme, a company-wide initiative to integrate pricing decisions and price more efficiently. This strategy originated from implementing the Evo Pricing tool as a value-based responsive pricing solution.

Evo links research to pragmatic results, which is why we ultimately decided to work with them. We were impressed by both their academic publications on the subject, as well as the practical cases demonstrating impact.

Evo implemented responsive pricing: rules-based, per-product pricing adjustments throughout the seasonal product cycle.

This approach relied on:

Evo analysed internal sales data alongside market and competitor data. The system optimised the impact by monitoring extensive external data, including over 1 million market prices, 10 competitors and the consumer behaviour of 16% of the global population.

Evo Pricing rigorously assesses each new pricing opportunity to ensure it achieves maximum impact at each step. Through an iterative test-and-learn process, its algorithms pragmatically adapt prices to local realities while following the constraints of a globally integrated strategy.

Pricing rules govern the timing of price changes throughout the season, with no adjustments allowed during peak sales periods. Prices are optimised to increase margin while constrained by the everyday low-price brand guidelines.

The initial pilots across France demonstrated significant revenues and margin lift. The new Juste Prix programme was launched with +€107 million extra yearly margin from better prices and markdowns.

Evo Pricing paved the way for Juste Prix to be a clear success. Despite the constraints we placed on prices and markdowns, responsive algorithms found plenty of opportunity for gains.

The Evo system embedded new pricing capabilities throughout the global network of Decathlon brands and stores, paving the way for new pricing organisation. This new structure created better pricing coordination without forcing standardisation.

Furthermore, Evo data scientists held interactive training and planning sessions alongside Decathlon’s in-house data science talent, empowering their growth and ensuring they can develop tools in tandem in the future.

Evo was willing to work alongside our internal data scientists as collaborative partners. They shared their algorithm and full methodology, and we made them the first external partner that had direct unmetered access to our full data lake.

After Evo technology helped launch the successful pricing programme, Ben Seghir decided to expand data-driven decision-support technology across other functions. Evo’s tools could support decision integration across replenishment, product assortment, planning and logistics, in addition to pricing and markdowns.

During the transition, the Evo team worked directly with Decathlon managers to support global rollout and organisational changes. Ben Seghir knew that these changes would inherently change the nature of some key staff members’ jobs, and he wanted to mitigate any potential adverse outcomes. The Evo team worked alongside Decathlon to ensure positive impact and internal buy-in.

As Decathlon’s partnership with Evo has grown, so has margin: an estimated +€160 million in additional margin from the first supply chain implementations. As the system learns and integrates further into operations, the impact will continue to grow.