Optimize with Confidence  


Next week Revionics will be in the audience, proudly watching our customer and partner, Mark Kelso of Pamida, present at the 2011 Retail Technology Conference. Mark has a great presentation lined up that speaks to Pamida’s strategy and related results of their test-and-control price optimization initiative. Retail technologists should take note, as this is a rare opportunity to hear first-hand how a technology investment drove significant increases in sales and margin dollars in a difficult economy.

The Arsenal for Food and Gas Cost Increases

Tuesday, 15 February 2011 00:00

By Jeff Moore, Revionics Vice President of Science and Analytics 

Jeff Moore, Revionics Vice President of Science and AnalyticsRetailers are still reeling from the commodity inflation experienced in 2007 and 2008.  Many attempted to hold prices to compete against the big box stores, as consumers became more value-conscious in the wake of the recession.  The result for many retailers using legacy pricing technology was margin erosion and damaged customer loyalty.

Retailers are facing a new wave of cost increases due to commodity and gas price increases.  Today’s challenge is compounded by a forever-changed, price sensitive consumer.  Harry Balzer, chief industry analyst at NPD and author of Eating Patterns in America, stated:

By Richard Huston, Director of Solutions Consulting, Revionics Inc.

Markdowns are sometimes seen as a way to just push out unwanted inventory and clear space for more desirable products.  Here are some questions and thoughts to consider…

Do you have thoughtful merchandising strategies for markdowns?

By Dan Muldowney, Strategic Account Executive

One common characteristic I have found with many retailers that I have worked over the last six years is that category managers spend far too much of their valuable time on price maintenance.   Strategy often takes a backseat to other priorities such as shifting costs and competition.  In many instances where the category managers have pricing analysts to assist, the majority of their time is spent on price oversight and approval as well as negotiating promotional events with vendors and still not strategic.

Not Your Father's Category Manager

Wednesday, 18 August 2010 00:00

Category Management is undergoing a quiet revolution. Gone are the days when a category manager could trust in intuition and experience alone. The new generation is embracing Retail Science to make better price, promotion, merchandise and assortment decisions. Retail Science applies sophisticated data analysis to help better understand what customers want. Data sources include Point-of-Sale (POS), Transaction Log (TLOG), competitive pricing, panel, syndicated, weather, demographic, and location attributes. Data cleansing, quality assurance tests and outlier analysis are essential for measuring causal relationships. The result is a demand model that accounts for price elasticity, promotional lift, merchandising, seasonality, cannibalization, affinity, space, and assortment. Category managers use this demand model to evaluate and compare scenarios. For example, a supplier may offer a incentive to promote Cheerios. The category manager can evaluate the category profit accounting for vendor incentives, cannibalization, and affinity.  This analysis shows how cannibalization of private label erodes category margin. Even the impact on loyalty customers can be evaluated in terms of basket size and trip frequency by customer segment.

Are you satisfied with your gross margin and sales per square foot? If not, consider putting the customer first by adopting consumer-centric technologies for pricing.  In "Putting the customer first", Susan Boyme emphasizes how important it is to “evaluate price elasticity and tailor pricing across specific regions and individual stores.” Revionics is working with Insight-out-of-Chaos to taken customer centricity to the next level by identifying the best items to promote by customer segment. Loyalty data was analyzed in terms of basket profit and trip frequency. While the revenue and profit per basket of loyalty shoppers were found to twice that of non-loyalty shoppers, it was surprising to learn that loyalty shoppers as a whole vary widely in shopping frequency and basket profitability. It was evident from the analysis that there is a large opportunity to increase increase basket profitability and shopper frequency by targeting incentives to specific customer segments. At the same time retailers can build customer loyalty in their VIP shoppers through customer centric offers.

By Erik Osborn, Business Consultant at Revionics

Price optimization works best when the retailer is confident in their pricing strategy for their business and the product categories they carry.  For this reason, we chose to blog about the importance of defining category role when approaching any pricing initiative – whether your initiative is around everyday price optimization, promotion planning, and markdown optimization.

A Group Contribution from the Revionics Consulting Team

If any of us had a crystal ball, we would most likely be enjoying a relaxing life somewhere, as we would have foreseen the recent changes in our economy and been better prepared to weather the storm. But since most of us are not privileged to that mystical tool, let’s talk about a few things we should all have on our immediate radar and be planning for as we look to the coming months.

Integration---Tomorrow’s Solution Today

Tuesday, 30 March 2010 00:00

Revionics’ mission is to increase retailer profitability by enabling better management of price, promotion, markdown, inventory, assortment & space. Revionics is unique in that we offer an integrated solution that shares a common demand forecast across all of these functions. In this article, I answer the question, “Why is an integrated solution better than individual point solutions?”

The Retailer-Centric Supplier Portal

Tuesday, 23 March 2010 00:00

By:  Susan Boyme, Vice President of Marketing, Revionics, Inc.

As Revionics announces the release of Collaborate, our new supplier portal for retailers, it causes me to reflect on  the web-based trading exchanges, marketplaces, and other “one-to-many” and “many-to-many” models I have bumped into over the past 15 years.  Regardless of model, the most successful initiatives have one thing in common – the party sponsoring the initiative must be the buyer.  Supplier-driven models are well intentioned, but don’t get traction.