Improving Efficiency and Effectiveness
While the sizzle of an optimization solution is the science, there is a great deal of value provided by automating pricing tasks.
Rules management automates the application of retailer-supplied pricing rules. When you consider the tasks and processes involved in price management, one single vendor cost change may trigger tens to hundreds of price changes within a category. Line pricing rules, size parity, zone pricing, private label shielding and other category rules must be followed in order to maintain role hierarchy and intent for the affected category. Without automation, something as simple as a cost or competitor price change proves to be a very time consuming challenge.
Rules Management Capabilities
Price management software permits retailers to define pricing, business and operational rules around everyday pricing, promotions and markdowns. These rules can be used to directly drive recommendations or can be used in conjunction with demand-based optimization science to create more customer-centric policies and strategies.
Key features of everyday price management tools should include:
- Comprehensive Rules Management functionality containing sets of retail pricing, promotion and markdown rules with a rules editor and rule prioritization and/or relaxation capabilities to handle conflicts
- Advanced Price Maintenance facilitating operational price management to handle frequent vendor cost changes, competitive price changes and operational constraints
- Regularly Scheduled Price Recommendations providing the capability to monitor and deliver base price, markdown and promotion recommendations at appropriate intervals. The rules applied in order to achieve the recommendation should be transparent to the user in order to encourage fast system adoption.
“…Revionics’ unique ability to help us manage our prices in a highly competitive marketplace as well as continue to offer our customers the value they have come to expect from K-VA-T Food Stores…is especially important at a time where our costs continue to increase and many of our customers are still struggling in the current economic uncertainty."
Richard Gunn, EVP of Merchandising and Marketing, K-VA-T
Blending Art and Science
Price management systems which are solely rules-based, though often marketed as price optimization systems, provide most of their benefit to the retailer through the automation of an otherwise lengthy and error-laden process. They do not scientifically evaluate price elasticity and optimize prices at a granular level, but are valuable as they automate the retailer’s pricing policies and rules at a general level across a category.
Revionics Life Cycle Pricing blends the automation benefits of a rules-based system with scientifically optimized, customer-centric price, promotion and markdown recommendations, resulting in significantly higher profits without sacrificing price image or customer loyalty. Through the use of our solution, customers have found that their category managers can shift their focus towards collaborating and negotiating with vendors, and time previously spent managing tactical tasks can now be dedicated to developing and monitoring strategies that achieve category and business objectives.
A clear advantage of the Revionics’ life cycle price optimization solutions is that they provide both management and optimization - allowing you to start with price management and seamlessly evolve to price optimization at a granular level. When we work with retailers implementing our solution, we typically recommend a “crawl, walk, run” approach. Just because our system can optimize pricing, it does not mean it has to on day one - you can start off slowly and gain initial benefits through the automation of pricing tasks and rules. Once users become comfortable with the system functions and navigation, you can begin to use price optimization for a few categories and monitor the benefits. As confidence in the system’s recommendations increases and ROI is proven, we roll out across all categories with high levels of user adoption.
Our software as a service model requires us to fulfill our obligation, and be a true partner to our clients, each and every day - and our near 100% retention rate is an attestation to our continuous levels of customer support and satisfaction!
Over 30,000 retail sites a day are receiving our strategic recommendations. Like them, you can make decisions with confidence knowing that they are rooted in a scientific understanding of actual consumer behavior and sensitivity while supporting the operational policies, rules and brand considerations that have traditionally guided retailers.
"I think one of the great side benefits is that our vendor relationships are getting stronger. With the new insights we now have into competitor pricing and our category management strategies, the vendors really come to the forefront"
VP of Merchandising, Mid-Size Grocer