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Use case

Delivery fees optimization

Additional Services and Delivery Fees represent an increasing stake in the act of purchase. The cost of the service has a strong (negative) impact on your P&L, while on the consumer’s side it is a key criterion for finalizing the shopping cart.

Pricing delivery fees and/or additional services is essential for commercial performance, our mission is to make it simple and profitable! To optimize your delivery costs, it is necessary to get out of the logic of passing on the costs (even partially) of the delivery to the consumer and move to a logic of global optimization of delivery + product. We adjust the cost of delivery to maximize the overall margin.

Delivery fees optimization


There are 3 main challenges to overcome:

  Measuring consumer sensitivity on delivery costs: To define the right price adjustment, you need to measure and understand the impact of increasing or decreasing the delivery price on conversion, revenue, margin by customer segment.

  Implement a rigorous analytical approach that minimizes the error rate while respecting operational constraints. Are you able to implement stable price tests over time? If not, you need to start with an analysis of the historical data.

  Prepare the data: to succeed, we must map for each order, the product margin and the associated delivery cost. We must therefore process your orders line by line as well as the invoices of your transport suppliers.


Our experience shows that the experimental method is the most accurate for calculating price elasticity and isolating the impact of external factors. We have step by step approach:

  Establish a clear correlation between the variation in delivery costs and their impact on the income statement.

  Determine the optimal delivery cost pricing configuration to meet your target on key KPIs.

  We build a simulation tool that uses an elasticity model built on the back of the experimentation results. The tool allows us to simulate the impact of delivery cost price changes on the P&L.

  Experiment regularly to update the elasticity and the simulation tool.

This iterative approach allows us to determine the optimal delivery cost pricing configuration to meet your target on key KPIs. Once the configuration is in place, we conduct additional experiments on a regular basis. We can use the same approach to optimize prices of additional services.


The elasticity curve and price simulation are displayed in performance visualization dashboard.

Thanks to the user-friendly interface of our web application, it is possible to observe the detailed impact of each price variation and to filter for all exposed dimensions. In addition, you can easily export all necessary data directly into Excel.

The simulation allows you to explore pricing scenarios and develop an understanding of the issues and opportunities taking into account elasticity. After selecting the scope, price change and target definition. We perform a simulation to define the impact on the price evolution.

We define the impact of the price change or the required price change that needs to be defined in order to achieve the proposed objectives.

Success Story Castorama

Castorama Success Story

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