Consumer Analytics Help Retailers in Today’s Economy
By: Ken Cline, Application Consultant, Revionics, Inc
I was recently reading Supermarket News, and came across this article that spoke to the state of the state within the grocery vertical. It speaks well to what it takes to succeed in today’s environment.
Food retailers are turning to analytical systems that can help them survive the harsh economy, according to SN’s latest technology survey.
Faced with the worst economic downturn in decades, U.S. food retailers are using technology to gain a better understanding of their position in the marketplace — and to optimize that position in respect to inventory, pricing, labor and a host of other business-critical elements.
Profit analysis is an application many worried retailers are turning to these days. While it ranked high on the list of priority items for 2008 at 25.5%, its popularity jumped to 36.2% on the 2009 list. Closely aligned with profit analysis is the expanding area of price and promotion planning and optimization.
Pricing has been an especially complex issue in the past year as retailers have grappled with rising commodity prices, as well as the need to lower retail prices to help out struggling consumers. Survey respondents consequently were prone to select promotion planning (30.9%) and price management (29.8%) as high-priority applications for 2009. Likewise, among applications that will be tested or launched in 2009, trade promotion management (16%) and price optimization (13.8%) ranked second and third.
Price optimization applications give retailers a forecast of what consumers are likely to do — and how profit margins will be impacted — when prices are raised, lowered or left the same. Without this scientific approach to pricing, retailers “are not going to find margin improvement,” said Scott Langdoc, chief strategist, Retail Centric, South San Francisco, Calif.