Supermarket News: Roundy's Sees ROI in Price Optimization
Roundy’s Supermarkets has found a “significant ROI” in the price optimization system it has employed over the past two years, said Jason Benish, vice president of pricing and strategic initiatives for Roundy’s.
In a study of price optimization’s effect on 10 categories at test and control stores, the chain found “the [trend] lines diverged” for year-over-year gross profit dollars, said Benish at a session here Monday at the National Retail Federation’s Annual Convention. “If I could make that kind of return on my [personal] money, I would probably not be here right now.” The system is provided on a software-as-a-service basis by Revionics, Roseville, Calif.
Roundy’s applies the system to all categories at its 165 stores, not including perishables, although the chain is looking at including produce, said Benish. “We wanted to make more fact-based decisions about prices that we did in the past,” using history to make forecasts of customer demand.
The system has also allowed Roundy’s to price by individual store clusters that have similar customers, he added.