Otrium Improves Seasonal Profitability by 12% with Elasticity-Driven Pricing

Learn how Otrium increased profitability across its seasonal assortment

Get the Case Study

Privacy Checkbox

I agree to receive email communications from 7Learnings GmbH about its products and services. You can unsubscribe from these communications at any time. For more information, please review our Privacy Policy.

Newsletter Checkbox

I would like to receive the 7Learnings GmbH newsletter.

Company Overview

Otrium is a leading digital fashion outlet marketplace that connects premium and luxury brands with a global community of value-driven shoppers. Founded in 2016 in Amsterdam, the company was built around a clear mission: ensuring that every piece of clothing produced is worn, addressing one of the fashion industry’s most persistent structural challenges: excess inventory.

Operating as a managed marketplace, Otrium enables more than 400 brand partners, including Tommy Hilfiger, Calvin Klein and Karl Lagerfeld, to operate dedicated digital outlet stores while maintaining control over pricing, merchandising and brand positioning. Today, Otrium serves over 5 million members across more than 20 markets, primarily in Europe, combining scale with a strong focus on brand integrity.

Otrium improves both profitability and recovery rates

Challenges

While Otrium already operated an automated pricing pipeline, existing predictive models proved insufficient for the volatility of the off-price market. Demand patterns shifted rapidly across brands, categories and seasons, making it difficult to consistently balance sell-through and margin.
In the outlet environment, customers expect prices to decrease over time. The challenge for Otrium was not whether to discount, but how far, identifying when a price reduction was truly required to drive conversion, and when it would unnecessarily erode brand value. Preserving brand equity for partners remained a non-negotiable priority.
Traditional pricing logic relies heavily on historical price points, but in off-price retail those signals quickly lose relevance. Each season introduces new inventory, changing consumer behaviour and new competitive dynamics. Otrium needed a more adaptive approach to understand real-time price elasticity at SKU level.
For Otrium and its brand partners, success is measured not only by sell-through, but by recovery rate, the percentage of original retail value retained. The objective was to maximise recovery rates across an entire season, without compromising conversion or long-term partner trust.

Solution

At the core of the solution is an elasticity-driven demand model that quantifies how changes in price affect conversion at SKU level. Rather than applying static pricing rules, the system continuously learns where demand is sensitive to price — and where it is not.
This enabled Otrium to reduce unnecessary discounting in areas where demand remained stable, shifting from a “sell faster” mindset to a more deliberate, margin-aware pricing strategy.
By incorporating brand-specific performance signals, Otrium can tailor pricing strategies to reflect each partner’s positioning. This ensures that premium brands are treated differently from more price-elastic segments, reinforcing trust and long-term collaboration.
Rather than optimising for immediate conversion, prices are steered across the full lifecycle of a collection. This allows Otrium to maximise profit at season level, while still ensuring healthy sell-through toward the end of the season.

7Learnings helped achieve:

12% increase

in overall profitability, driven by more precise, elasticity-based pricing decisions

Improved recovery rates

enabling brand partners to retain more value on excess inventory

Conclusion

By adopting an elasticity-driven approach to pricing, Otrium strengthened its ability to balance profitability with brand integrity. The shift from short-term discounting to seasonal optimisation has improved recovery rates for partners and delivered a double-digit profit uplift for the marketplace. The result is a more resilient pricing strategy, one that supports long-term brand relationships while delivering sustainable commercial performance.

“By improving our predictive pricing and, together with 7Learnings, focusing on price elasticity, we’ve been able to improve recovery rates for our brand partners while protecting their equity. This approach has helped us optimise pricing across the entire season and contributed to a 12% uplift in overall profitability.”

Tim Jansen

Head of Data, Otrium