TECHNOLOGY: The price software is right

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TECHNOLOGY: The price software is right

When it first appeared on the retail scene, consumer demand management technology -- also known as price and promotion optimization software -- was viewed by skeptics as little more than educated guessing.

The technology has since proved itself, however, as evidenced by year-after-year license renewals by the majors, and, more recently, a surge of independents jumping on the bandwagon as developers fine-tune lower-cost versions of the technology expressly to suit the needs of smaller retail operators. All of this activity places pricing optimization applications among the most deployed systems in the industry this year.

To put it simply, the technology works, and works well, say the retailers that rely on it. The scores of Ph.D.'s locked away in labs developing complex algorithms haven't worked in vain.

Following are firsthand insights from some recent converts to demand management tools.

Ball's Food Stores, Kansas City, Kansas (30 stores)

Solution: PriceStrat from Florham Park, N.J.-based KSS

"KSS has been able to quickly deploy price optimization inside of our operations, and we are intent on using the PriceStrat optimization solution to ensure that we are offering value to our consumers." -- Mike Beal, c.f.o.

Bi-Lo, Mauldin, S.C. (300-plus stores)

Solution: Price, Promotion, and TradePoint software modules from San Carlos, Calif.-based DemandTec

"Bi-Lo is known throughout the South for offering an exceptional selection of products as well as affordable prices to our shoppers. We believe our choice of [solution] will enable us to further enhance our customer-service levels." -- Dean Cohagan, president and c.e.o.

Brookshire Grocery Co., Tyler, Texas (150-plus stores)

Solution (renewed license for fifth year): Solution: Price, Promotion, and TradePoint software modules from DemandTec

"We're delighted with the rewards we've experienced during our past four years as a DemandTec customer. The software supports our strong commitment to customer service by helping us enforce pricing rules and improve decisions about our pricing and promotion strategies." -- Gary Butler, c.i.o.

Coborn's, St. Cloud, Minn. (33 stores)

Solution: Web-based Retail Advanced Pricing System from Sacramento, Calif.-based Revionics

"Revionics provided an answer to a very difficult question: How do you increase margins in the face of competitive challengers? The solution will help us to be agile in the face of competition, without giving away unnecessary margin." -- Andy Knoblauch, v.p. of sales, marketing, and merchandising

Cosentino's Food Stores, Kansas City, Mo. (two stores)

Solution: PriceStrat from KSS

"The benefits of price optimization are becoming well known within the grocery industry. By having KSS PriceStrat as an integral part of our pricing plan, we will have insight into the effects of tomorrow's prices and promotions, today. This insight will allow us to continue to provide our customers with the value they have come to expect from our stores." -- Dennis Reilly, c.f.o.

DeLano's IGA Markets, San Francisco (eight stores)

Solution: Web-based Retail Advanced Pricing System from Revionics

"Price optimization gives our organization the confidence to know how our customers are reacting to our price strategy in our new markets. The service helps us balance sales growth with achieving maximum profitability." -- Dennis DeLano, owner

Fresh Encounter, Findlay, Ohio (32 stores)

Solution: Web-based Retail Advanced Pricing System from Revionics

"Price optimization will help us balance retaining customer loyalty [with] ensuring our profitability now and in the future." -- Todd Perry, s.v.p.

Earth Fare, Asheville, N.C. (11 stores)

Solution: Web-based Retail Advanced Pricing System from Revionics

"Price optimization takes our pricing strategy to the next level. We can now focus more on other aspects of servicing the customer, because Revionics automates and improves many of the tasks related to pricing. Earth Fare expects to see a margin increase through weekly optimization of all product categories, including DSD." -- David Bowles, director of purchasing


Gigante, Mexico City, Mexico (about 265 stores)
Solution: PriceStrat from KSS

"Price modeling, optimization, and forecasting…will add tremendous value to our operations. It will provide our merchandising team with the ability to accurately forecast and evaluate the effects of our pricing and promotional decisions, before we implement them. This insight will allow us to work more closely with our suppliers to make sure we are delivering strong value to our consumers while achieving our company's financial goals." -- Alejandro Ahuad, commercial director

Merchants Distributors, Inc., Hickory, S.C. (Wholesaler supplying 600-plus stores)

Solution: Web-based Retail Advanced Pricing System from Revionics

"As a wholesaler, MDI is focused on helping our retailers compete on a level playing field with larger chains. The price optimization system is a perfect complement to our current retail support offerings." -- Jay Schwarz, v.p. of information services for Alex Lee, MDI customer

Sam's Club, Bentonville, Ark. (570-plus stores)

Solution: PriceNet daily pricing software for fuel operations from KSS

"Our goal is to deliver consistent value to our members, and KSS PriceNet provides us the ability to make sure we are accomplishing this, while complying with an ever-changing legislative environment." -- Rich Ezell, senior strategy manager, fuel

Super 1 Foods, Hayden, Idaho (nine stores)

Solution Web-based Retail Advanced Pricing System from Revionics

"It's key to our strategy in remaining the price leader in the marketplace. Understanding the impact of price changes in advance should help us fine-tune our price strategy and build our shopper's market basket each visit." -- J. Strahan, general manager

Yoke's Fresh Markets, Spokane, Wash. (13 stores)

Solution: PriceStrat from KSS

"The solution will give us a much deeper look into how to leverage pricing to drive demand. Previously, our pricing was rules-based and driven from cost, with some competitive analysis. This solution uses scientific analysis to deliver a more comprehensive look at how consumers react to different retails, as well as the relationship between products and pricing throughout the store." -- Joe Hanson, v.p. of operations