PROFILE

Matthew Pavich

Sr. Director Retail Innovation at Revionics, an Aptos Company

Matthew is the Managing Director, Global Strategic Consulting at Revionics, an Aptos Company. He specializes in pricing and retail strategy, corporate strategy and customer focused solutions. Matt is a leader in pricing strategy development, business strategy development and overall corporate strategy. Matt has a strong merchant background and experience with C-Level presentations. He has more than 20 years of experience in retail, encompassing consulting, buying, pricing and marketing across a variety of retail verticals, industries and regions. Matt has lived and worked in France, Germany, Hungary and South Africa (with additional long-term engagements in other markets) and has more than seven years of driving customer-focused success at Revionics.

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  • Posted on: 10/13/2021

    Will ‘hyperautomation’ determine retailing success from this point forward?

    Yes - automation (regardless of "hyper" status) will be critical. Simply put, things are evolving too rapidly to ignore AI and analytics. Whether the issue is supply chains, labor shortages, consumer demand shifts, inflation, evolving competitive landscapes or simple shifts in buying preferences - retailers need to have the tools, processes, strategies and people in place to react to evolving conditions with better outcomes. Automation or hyper-automation can help with this IF it's built around the right foundational elements, analytics and strategies. People will still absolutely be critical - but instead of manually solving complex problems in traditional ways, they will be designing the automation to make the right choices and to prioritize the right outcomes. The best retailers will be able to evolve and adapt more seamlessly and gain share profitably. The world is moving quicker than ever -- retailers need to as well.
  • Posted on: 09/22/2021

    What’s the best way to reap the benefits of consultants?

    Retailers can absolutely benefit from consultants as they provide expertise, have a broader view of the problem/opportunity being addressed and offer an unbiased view which isn't as influenced by internal politics. Having said that, many consultant engagements can be quite expensive and often are a "one and done" with no sustainable value built into the equation and a need for additional spending to get more value. The best consulting engagements are the ones where the consultants teach the retailers "how to fish for themselves" instead of handing them a "fish." These engagements are the ones that invest in new capabilities and create fluent organizations that know how to use the right analytics and solutions to drive continuous value. The worst ones drive $x in short-term profit, only to leave the retailer hanging 18 months later with fewer shoppers, unneeded complexities and no additional infrastructure to support long-term growth.
  • Posted on: 09/13/2021

    Can Kroger offset its margin headwinds?

    It's not about how much it should raise prices, but understanding which items it should be raising prices on and which ones it should continue to invest in to maintain its competitive position. Having a balanced pricing approach to offset cost increases is the only correct solution and has helped numerous retailers establish a win-win approach during inflation by raising profits while offering better prices on the key items most essential to consumers. Having a price optimization platform and the right analytics can definitely help define this balance and I've seen some really fantastic balanced results coming out of high inflation/cost pressure markets from retailers who have done this. The worst solution is to raise prices to hit a margin target without listening to your customer and understanding the long-term impacts of those increases.
  • Posted on: 09/01/2021

    What’s the formula for e-commerce profitability?

    DSG has done a really great job of transitioning from a primarily brick-and-mortar retailer into a successful e-commerce player in a short period of time, while still investing in a top notch store experience (climbing walls, batting cages, etc.). Having worked with DSG, I can attest that they have made a lot of investments to improve their pricing capabilities and this has paid off throughout the product lifecycle across all channels. On a larger retail note, the vast majority of retailers could benefit from a robust, analytical analysis of promotional effectiveness. In my role, we've helped numerous retailers on this front and it is alarming how many promotions are ineffective - sometimes that number can be north of 50 percent and drive massive profit losses. In addition to promotions, the time is now for retailers to start really investing in their online strategy - do they follow the right competitors? Are they being competitive on the right items? Are they treating online consumers the same as their brick-and-mortar shoppers or are they actually looking at the data and creating a world-class strategy to meet the needs of that channel's shopper? The best retailers listen to their customer.
  • Posted on: 09/01/2021

    Ending prices that end in 99 cents

    An interesting study, but one that might prove the opposite. A larger percentage purchased the lower price when it was 95 cents than when it was a dollar. More people traded up when it was a dollar. This study is actually evaluating several different concepts. It implies that "psychological" pricing works because the 95 cent price had more success than the $1. It also evaluates "trade up" pricing and also concludes that more people will trade up when there isn't a more enticing lower price once again validating the value of the 95 cent coffee vs. the $1 coffee. Having said that, we know nothing about the total volume of sales, total revenue or cost structure of the different sizes of coffee so, from a retail perspective, it's not apparent which price structure was optimal. The reality is that a 25 cent premium for the trade up was probably sub-optimal all along and an advanced pricing solution might have ended up with a 99 cent small and a $1.29 large. Finally, as others have pointed out -- students and coffee with small price points may not be indicative of larger trends as I would have personally always bought the larger coffee in all scenarios. One thing is clear, with fewer cash transactions, more e-commerce and several large players abandoning price point endings, retail is evolving on this front and cherished price points may not be as relevant as they once were.
  • Posted on: 08/31/2021

    How should big box chain retailers deal with disaster response?

    I agree with Mark - retailers should prioritize their employees and make sure they are safe and taken care of when a disaster strikes. I trained as an EMT and one of the first things you learn as a first responder is to make sure you are safe before attempting to help others. You can't help others if you're not safe yourself. This doesn't mean, however, that the community and customers are not a priority. The whole purpose of retail is to solve consumer needs profitably, and in times of disaster that remains true minus the profitably element. In addition to all of the things listed in the article, the best retailers need to become more proactive in disaster preparedness and create strategies and operational policies that make them better able to serve both their employees and customers when disaster strikes. One example is simply having a plan in place for Gulf stores during the hurricane season that helps all parties be more prepared. Advanced analytics can help with this - everybody knows about water and generators, but how do purchasing patterns differ in Louisiana in August vs. in California during fire season? Which products are appearing in certain baskets? How are supply chains designed to support a run on essentials? Having a plan in place can't prevent a natural disaster, but it can produce better outcomes for your staff and impacted communities.
  • Posted on: 08/11/2021

    Knowing when to make a change for a brand’s sake

    It's interesting that the "target audience" was mentioned briefly and the rest of the list stemmed from things happening internally to the organization. As some have already commented on, the real key here is the target customer. All of the above are great but the reality is that a great brand resonates with its customers and shouldn't be changed unless there is a strong enough business case to determine that it is losing relevance with the most important target customers. Most customers don't really care about a lot of the internal happenings of the organization - they want a brand that they know and trust that aligns with their lifestyle and differentiates itself enough to remain unique. The right loyalty, CRM and customer analytics can help retailers on this journey. Regardless of approach, the customer needs to be front and center of this major, strategic decision.
  • Posted on: 08/02/2021

    Should food be an afterthought for Target?

    While I will admit that my former life as a Grocery Buyer at Target may bias my perspective, I believe that food is absolutely critical to Target's success. Expanding its Grocery capabilities about ten years ago with its PFresh initiative was a key element to its growth and drove frequency and traffic in stores which led to increases across all categories. Fast forward to today and the need to drive frequency coupled with Target's success in omnichannel makes it an even bigger opportunity where Target can drive more business through a renewed focus on Grocery. Without grocery, the "one stop shop" model falls apart pretty quickly and makes Walmart, Meijer, HEB Plus, etc. better options for a lot of shoppers. Few retailers can offer you Target's level of style and fashion while allowing you to get those few grocery items you ran out of in the same trip.
  • Posted on: 07/27/2021

    Will the Delta variant keep shoppers and unvaccinated workers at home?

    It remains to be seen how the Delta variant will impact retail as it continues to spread across the U.S. Without getting political, there are clearly segments of the population and regions that will be more impacted than others. There will also be specific retailers, verticals, brands and items that will be more impacted than others. What will be essential for retailers is the ability to react dynamically as the situation evolves while also having the flexibility to make regional adjustments when national moves aren't necessary. Having the right analytics and AI can help on this front. In all cases, there won't be a one size fits all answer to this unique challenge, but the best retailers should weather the storm.
  • Posted on: 07/23/2021

    Will an enhanced rewards program turn Gap’s customers into ‘lifelong loyalists’?

    This approach sounds like a winner -- it makes sense to combine all banners to drive loyalty across brands while also providing incentive to shop at other GAP banners. The ability to support worthy causes is also a nice touch that is not only smart business, but can actually drive meaningful change. Brand and retailer loyalty is increasingly important as customer leakage remains at very high levels. In order to allow this program to drive sustainable loyalty and lifetime value, GAP will need to leverage the best customer and loyalty analytics and make sure to promote the right offers and products for their most loyal consumers.
  • Posted on: 06/18/2021

    Retailers must centralize their data to thrive

    Having robust, centralized, accurate data is absolutely critical for retailers in today's retail landscape. Every aspect of business including supply chains, operations, pricing, assortment planning and loyalty programs rely on a robust foundation of data. The more data that is available - the more levers a retailer can pull to achieve strategic objectives and the more AI can accelerate that success with better forecasting and results.
  • Posted on: 06/10/2021

    Will grocery basket sizes be cut down to their former size?

    On a macro level there will be a natural increase in frequency and decrease in basket sizes as the economy recovers and vaccination rates rise. The good news for retailers is that they can control their own destiny on this front as there are several proven strategies and tactics to increase frequency and/or basket sizes depending on priorities. The right analytics and technologies can help. Some classic examples are advanced affinity/cannibalization analyses and having effective "trade up" strategies. Great customer analytics can also help identify pantry loaders vs. frequency shoppers and allow grocers to create more targeted approaches to help achieve intended objectives. The best grocers don't have to sacrifice frequency or basket sizes if they take a balanced, customer-informed approach and make the right choices.
  • Posted on: 06/09/2021

    Is now a good time for retailers to open new stores?

    As others have pointed out, the answer varies based on retail vertical, e-commerce capabilities and the shoppers you cater to. Despite the hype surrounding omnichannel, it remains true that c-stores, dollar stores and pharmacies (and others) will always need to provide brick-and-mortar locations in the right areas to serve and expand their pool of customers. Regardless of retail vertical, the best retailers are investing in numerous channels and capabilities to exceed the expectations of their shoppers and grow share. Simply adding stores can grow sales in the short-term, but building smarter, more customer-centric shopping experiences across numerous channels is a better approach in the long run.
  • Posted on: 06/01/2021

    Will other retailers follow Costco and bring back food sampling?

    With all of the omnichannel experiences now available to consumers, sampling remains an important way to entice customers into stores and is a useful promotional lever and way to showcase a brand or product. Sampling will come back but, as the article states, it will need to come back in a way that makes shoppers feel safe. As with other promotional activities, retailers will need to monitor the impact of these events and adapt as conditions change. You can't taste things on the internet and you can't replace the joy of seeing a free sample while making a shopping trip -- so this practice should come back in full force once retailers and consumers are fully ready.
  • Posted on: 05/06/2021

    Will a new subscription program make Circle K a daily stop for members?

    More so than most retailers, c-stores are a frequency game. While a lot of retailers are able to grow traffic via omnichannel capabilities, it still remains a strategic imperative for c-stores like Circle K to leverage their numerous physical locations to grow sales via new customers and increased frequency. This program appears to be a logical way to achieve that objective. Based on the GA/SC test, it seems to be achieving its intended objective. For Circle K to remain successful, they will need to monitor the program, learn about their customers and continue testing ways to make the program even more successful. One low-hanging fruit example is understanding which products are appearing in the same baskets as the Sip & Save ones and figuring out ways to maximize each trip. In all cases, frequency will increase as vaccinations progress and the economy improves - the best retailers will find ways to drive even larger increases.

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