Retailers have begun to feel the effect of the weakening economy, as consumers are cutting back on discretionary spending. Most retailers acknowledge the strategic importance of pricing and its impact on the bottom line, but many lack the processes and tools to effectively manage price optimization.
Retailers know that consumers respond to an effective pricing strategy. Developing that strategy, however, is no easy task. With multiple data sources providing various consumer metrics, developing the right strategy on a store-by-store basis is difficult. Intelligent pricing decisions require a firm understanding of consumer demand, competing strategies, and effective promotional approaches.
Price optimization software solutions capture sales data within individual stores as well as across regions and entire chains. Retailers can evaluate this data to effectively price products and services based on sales history. They can also use price optimization software solutions to track and report on competitor prices. Pricing trends are easily identified, and retailers can adjust their own pricing structures accordingly.As vendor pricing of parts shifts along the supply chain, retailers can reflect the change easily throughout their pricing structures. Price Optimization solutions also play a part in helping adjust price to reflect fluctuation in resource costs.
With the Microsoft platform already in place in many retail environments, it makes good financial sense to take advantage of these investments when implementing a price optimization solution. Microsoft partners offer relatively inexpensive software solutions that enable retailers to implement effective price optimization. One such partner is KSS Retail. They have implemented their price optimization solutions at several retailers including Rite Aid and United Supermarkets. See http://www.kssretail.com/customers.html
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Great post Shish, however, Price Optimization alone is insufficient at fully utilizing all of the demand levers within an organizations power to improve their bottom lines. Our approach using a Revenue Optimization toolkit that contains the enabling technology, methodologies and decision-making infrastructure to empower organizations to achieve excellence in Scientific Micromarket Management, which allows companies to scientifically manipulate all of their marketing levers by discovering and optimizing the potentially billions of unique customer-product combinations, where each combination has an optimal price. To optimize each of these transactions - daily! - allows companies to achieve long-term sustainable gains in financial performance, and attain a sustainable competitive advantage.