Case study - Zen Electron

Meet Zen Electron, a multi-brand electronics and appliances retailer, which will help you learn more about meeting a business’s pricing requirements.

After completing this page, you should be able to:

Implement a pricing strategy that ensures uniform pricing for a Product Variant across multiple sales Channels and markets.

In our Price calculation module, we covered the pricing capability of Composable Commerce in detail. Before jumping into this module and learning how to work with this capability, let’s review some of the main concepts we covered.

Quick recap

Embedded Prices & Standalone Prices

Composable Commerce provides two types of internal pricing, Embedded Prices and Standalone Prices.

Embedded Prices

Embedded Prices are stored as part of a Product.
Embedded Prices are limited to 100 Prices per Product Variant. Given a maximum of 100 Product Variants per Product (this is a soft limit and can be raised in certain circumstances), this equates to potentially 10,000 Prices within one Product.
The total data for a Product, stored as a JSON document, cannot exceed 16 megabytes. This limit is critical to consider when modeling Prices and Product Types together. While 16 megabytes is a hard limit, we recommend keeping average JSON documents to 100 kilobytes, and large documents to 2 megabytes.

Standalone Prices

Standalone Prices are stored separately from the Product and are linked via the SKU.
You can have up to 50,000 Standalone Prices per Product Variant.
Standalone Prices are ideal for extensive product catalogs where Price complexity and volume exceed the practical limits of Embedded Prices.

Price scoping

Detailed scoping helps in selecting the appropriate Price for the Cart, as detailed in our documentation under Line Item Price Selection. With multiple Prices being possible for a single Product Variant, Composable Commerce can scope the Price according to the following properties:

Customer Group: Prices are tailored for specific customer segments.
Channel: uniform pricing across various sales Channels.
Country: Prices are adjusted based on the country.
Validity dates:
- Prices can have start and end dates, allowing for future-active pricing setups.
- Prices without specific dates are always considered valid.

Tiered Prices

Composable Commerce supports Tiered Prices that have the following characteristics:

Apply to both Embedded and Standalone Prices.
Are based on quantity and, therefore, are beneficial for bulk purchases. For example, a base Price applies for a single unit, with reduced/increased Prices as quantity increases.
Are overridden by Product Discounts.

Price selection process

On a high level, this is how the Price mode selection process works:

An overview graphic of the Price mode selection process.

External Prices

In some cases, Embedded Prices and Standalone Prices may not meet your requirements. To address these situations, Composable Commerce provides external pricing solutions that offer greater flexibility:

Dynamic pricing: external prices are useful when internal pricing models cannot handle specific dynamic needs. For example, in B2B pricing, an external system might calculate the Price dynamically based on multiple factors.
High volume pricing: external Prices are also helpful when managing more than 50,000 Prices for a Product Variant. 50,000 is a soft limit but can be increased under certain conditions.
Storage flexibility: you can store external Prices either in Composable Commerce as Custom Objects or outside Composable Commerce, depending on your needs.
Custom integration: integration with storefronts and carts requires custom code to ensure that Prices are applied accurately.

These concepts shall come in handy as we move through our use cases and explore how we can use Composable Commerce to solve them.

Welcome to Zen Electron

To further our learning on Prices, we are going to spend time with a case study featuring Zen Electron, a leader in the Australian electronics and appliance market. Let's first examine Zen Electron’s business structure and pricing needs, then explore how Composable Commerce can address those requirements.

Zen Electron operates extensively in Australia and New Zealand, serving its customers through two distinct brands: Electronics High Tech and Zenith Living. While each brand maintains its unique identity, they share technological solutions and product catalogs, creating complex pricing challenges that require tailored strategies.

Brand profiles

Electronics High Tech

Known as "The Discount King," this brand dominates the electronics market with its competitive pricing and minimalistic shopping experience. Targeting a younger, tech-oriented demographic, it specializes in gadgets like TVs, computers, and mobile phones. The brand’s appeal lies in its ability to offer the best deals without focusing on an elaborate in-store experience.

Zenith Living

This brand is synonymous with "Service with a Smile" and offers a more upscale and personalized shopping journey. Zenith Living caters to a mature audience that values high-quality home appliances and appreciates detailed services like delivery and installation. The focus here is on enhancing the customer experience through thoughtful service and premium products.

Market and operational overview

Retail presence in Australia and New Zealand:

Electronics High Tech:
- Australia: 200 stores across various states
- New Zealand: 20 stores
Zenith Living:
- Australia: 102 stores
- New Zealand: None

This provides for a complex Composable Commerce Project setup, typical of a company at an enterprise scale, requiring well-thought-out solutions for product catalog management and pricing.

Product catalog

In total, Zen Electron has a total of 46,000 products in its catalog, averaging three Product Variants per Product.

Pricing & marketing alignment

Zen Electron has the following pricing requirements that need to be incorporated in their Composable Commerce solution:

Zen Electron employs eight standardized price lists to ensure pricing consistency across all selling points. Each list has different Price points and can be sorted by Price grouping from lowest to highest.
Each physical retail store has the right to select their Price list and override Prices for specific products on an ad-hoc basis.
When there is a sale, the fixed sales Price must be applied across all sales channels and override any other Price, in a manner that requires no intervention by the store personnel.

This system plays a crucial role during sales events, requiring all locations to adhere strictly to set Prices, thus guaranteeing a uniform customer experience both online and offline.

Special pricing model

Electronics High Tech has a special Customer Group called "Staff & Friends" where they offer a substantial 30% discount off the original Price. This discount is exclusive and not combinable with other promotions.

As we progress through this module, we will explore how Zen Electron leverages Composable Commerce to implement these critical pricing strategies. We'll see firsthand how Composable Commerce's versatility aids in aligning pricing tactics with the company's broad market and operational objectives.

Let’s jump into how to solve our first pricing requirement after a quick knowledge check.