Below is a summary of our interview with Sheetal Chavan. You can listen to the full interview using the embedded media player below or in your favorite podcast app (e.g., Apple Podcast, Spotify and Amazon Music).
In this episode of Pricing Heroes, we sit down with Sheetal Chavan, the Commercial Pricing Lead at Zalando, one of Germany's largest online retailers selling shoes, fashion, and beauty products. With six years of experience in pricing and a diverse background across various business functions, Sheetal shares her journey into the pricing profession and offers valuable insights for both newcomers and seasoned professionals in the field.
A Serendipitous Journey into Pricing
Sheetal's path to pricing was unexpected. After pursuing an MBA to enhance her business acumen, she encountered pricing as a subject in her final semester. However, it wasn't until a conversation with an alumni friend that she considered pricing as a profession. "Pricing was not on my mind, to be very honest," Sheetal admits. "I had never heard of pricing as a profession after that. That is when I started exploring pricing and I got into pricing." This experience highlights a common theme among pricing professionals – many discover the field by chance rather than through deliberate career planning.
Sheetal's diverse background in engineering, marketing, business development, and operations proved invaluable in her pricing career. She emphasizes that pricing doesn't exist in isolation – it requires support from various business functions. "Pricing does not stand on its own. Pricing needs the support of all these functions," Sheetal explains. Her diverse experience helped her develop strong business acumen and improve stakeholder management skills, which she considers crucial for success in pricing.
Making an Impact: Data-Driven Pricing Strategies
In her first role as a pricing manager at Movinga, Sheetal introduced a new pricing model that resulted in a 10% uplift in margins without adversely impacting revenue. She also improved the conversion rate of low-performing categories by 60%. Her approach included identifying pain points through stakeholder conversations and leveraging available data to understand performance issues.
"What I did was I created a dynamic margin system, pricing model, where the margin would dynamically change," Sheetal explains. She emphasizes the importance of testing new models on a small scale before full implementation. "After testing and after the results, we realized, okay, the absolute margins improved, but also the conversion rate of this high volume and high distant moves also improved."
Establishing a Pricing Function from Scratch
At Freenow, Sheetal was responsible for centralizing and refining pricing operations across eight European markets. Her approach to establishing the pricing function included educating stakeholders on the importance of pricing, securing dedicated data support, and implementing monthly reviews to showcase pricing impact on KPIs.
Sheetal faced several challenges in this role, including gaining acceptance for the pricing function and centralizing decisions previously handled by local markets. "What I did there was to really start with education, educating the stakeholders on the importance of pricing," she shares. She also highlights the importance of data in proving the impact of pricing decisions: "Unless and until we don't have data, we really don't understand what is the impact of pricing."
Pricing Strategies at Zalando
As Zalando faces competition from fast-fashion brands like Shein, Sheetal explains their approach to maintaining growth: "Zalando stands for quality. And this is not something the players who come with really low points in the market stand for." Instead of competing solely on price, Zalando focuses on quality and has introduced a loyalty program to reward returning customers.
"This point based system rewards the loyal customers. So this is also helping us to improve our returning customers," Sheetal notes. She emphasizes that Zalando aims to be the first point of contact for fashion consumers, staying true to its brand identity rather than engaging in price wars with competitors.
Tools and Technologies for Pricing Professionals
Sheetal emphasizes the importance of data analysis tools (BI, SQL, Python), competitive intelligence tools, and internal KPI tracking systems for effective pricing strategies. "With artificial intelligence in data, you just ask a few simple questions based on the past data that you already have in your system as to what would be the preferred actions to be taken or what were the actions taken and what was the result," she explains, highlighting the potential of AI in future pricing strategies.
Advice for Aspiring Pricing Professionals
For those starting their pricing careers, Sheetal encourages approaching the field with a learning mindset. "What advice I would give is for whoever's starting in this profession to come with the mindset of learning and learning not just about pricing, but also about the business," she advises. She emphasizes the importance of developing strong communication and negotiation skills, as pricing professionals often need to work with various stakeholders.
Recommended Resources
Sheetal recommends several resources for those interested in pricing:
