By Jason Gatoff, Senior Director of Product Marketing

Last week was our annual Customer Forum – Insight 2011 – and based on the initial input from attendees it was a great success.    It was the first Revionics Customer Forum that I had the opportunity to be a part of as a member of the Revionics team and wanted to share some high level observations and information about the event:

• Attendance was almost twice that of last year’s Customer Forum – including attendees from our 1st customer, Van’s Markets and our most recent customer, Gander Mountain.
• The event was filled with opportunities for the leading retailers to network with their peers and industry though leaders to share experiences and best practices with Life Cycle Price Optimization.
• Attendees were able to hear from four Revionics customers on the main stage – Tractor Supply Co., Pamida, Longo’s and Family Dollar. They presented powerful case studies on their journeys with price optimization – highlighting the financial and operational benefits they have received by leveraging Revionics solutions.
• Revionics domain experts hosted sessions and workshops that provided actionable insight on topics including competitive pricing strategies, leveraging simulation capabilities in this dynamic economic environment, private label strategies, maximizing markdown margin, and improving promotion effectiveness.
• Our partner ecosystem played an active role in the event with sessions led by Planalytics and Willard Bishop and participation in a panel focused on leading edge ways to leverage competitive data by RivalWatch, Comparative Prices International (CPI), and MyWorld.
• Greg Girard, Program Director at IDC who has a deep history in covering the Retail Price Optimization market, kicked off the event with a presentation focused on next generation price optimization capabilities to win in today’s market as well as in the future.

You can read more about Insight 2011 in our post event press release. 

We are already in the process of planning next years’ event and received some great input as to how to make the event even more beneficial for our customers.  Don’t hesitate to let me or your Revionics contact know if you have any questions or want any additional information about Insight 2011 and we look forward to an even better event in 2012.

Why prioritize a price optimization initiative? Consumer demand patterns and price determination have changed. We can all see it in our own lives, consumer choices, and the value focus. The question is…have you up-leveled your analytical technologies that help category managers and pricing analysts make the best decision on what your prices should be? Do your pricing tactics align and help you meet your category roles and goals?

Do you take elasticity, psychological rules, business practices, pricing image, and merchandising strategies into your price determination?  Are you able to successfully manage the prices related to KVI driver products and all the price points for your private label products and good-better-best relationships?

Your pricing image and price determination is too important to the consumer view, response, and performance to go overlooked. Merchandising granularity has forced retailing to move from national to regional to geographic to demographic and to unique by store. As we develop our localization and one-on-one marketing plans, the right price for the right location becomes more paramount.

The pressures are building … increase sales, maintain margin, grow the basket size, and increase traffic… All at the same time!  The Retail Technology Conference is an excellent opportunity for those attending to network and learn from one another. Revionics will be there to share case studies, and discuss how we can support the development of pricing tactics that align your category roles and definitions so they become a reality. We can quantify bringing multiple goals and business rules into a sales, profit, and margin perspective…thus making the alternatives a fact-based discussion that is driven by your customer’s behaviors.

Interested in attending the RTC? It’s not too late to register! Hopefully we will see you in beautiful Orlando, Florida.

Retailers are still reeling from the commodity inflation experienced in 2007 and 2008.  Many attempted to hold prices to compete against the big box stores, as consumers became more value-conscious in the wake of the recession.  The result for many retailers using legacy pricing technology was margin erosion and damaged customer loyalty.

Retailers are facing a new wave of cost increases due to commodity and gas price increases.  Today’s challenge is compounded by a forever-changed, price sensitive consumer.  Harry Balzer, chief industry analyst at NPD and author of Eating Patterns in America, stated:

“It amounts to ‘relative food inflation’.  [Consumers] have so much to spend on food and they will carefully pick-and-choose how to spend it.  Looking for more coupons and discounts, buying more private label foods, eating more leftovers, and generally getting the most bang for the buck.”

When fuel and commodity prices are on the rise, retailers will generally see cost increases across the board.  Some categories, vendors, and products will be hit harder than others depending on exposure to increasing commodity costs.   Retailers with solutions such as Revionics Price Optimization can proactively plan for these increases and automate much of the execution effort, preventing negative impact to consumer loyalty.

How can price optimization help?

• First – The solution is able to maintain margins by identifying less price-sensitive items and recovering margin on these items.  A retailer using our software will do much better than a less sophisticated retailer that simply spreads their price increases across the category or responds product-by-product by boosting prices to recover eroded margins.
• Second – Similarly, Key Value Items (KVI) capabilities within our solution allow a retailer to maintain a sharp competitive focus on the items that dominate customer price perception while remaining non-KVI items can be given greater latitude to respond to margin pressure.
• Third – Because costs change progressively over time (not necessarily all at once), it is important to maintain size/price relationships and brand-to-brand/PLG pricing relationships.  This is another area where Revionics finds ways to recover margin while maintaining overall pricing alignment and consistency.  In comparison, a less sophisticated approach would reactively apply cost increases without aligning pricing relationships over time.  Worse, such an approach may fail to consider the total effect of price movement across related items.
• Finally – Price optimization dynamically reconciles margin goals with customer sensitivity.  As costs increase, price optimization will attempt to recover profit, but the solution may not recover penny-for-penny costs in recognition of the elastic effect of price on consumer demand.  The Revionics solution can also recognize increased customer price sensitivity over time in the face of rising prices and will respond by taking greater margin compression on items and categories where customers show increasing sensitivity – recovering more margin on less price-sensitive items and categories.

These are just a few examples of how retailers with the right arsenal of tools can proactively and effectively manage cost increases while protecting profits.  This blog has focused primarily on Everyday Pricing, but more solutions are available for TPR, Promotions, and Markdowns.  Please comment, or reach out to us at info@revionics.com for more information.

Markdowns are sometimes seen as a way to just push out unwanted inventory and clear space for more desirable products.  Here are some questions and thoughts to consider…

Do you have thoughtful merchandising strategies for markdowns?

As part of the product and pricing lifecycle, the markdown strategies are important for capturing revenue at the end of a products life on your selves.  Consider that varying strategies affect price image, how much inventory you will sell, and how much revenue you will get for that inventory.  Whether the event is an aisle reset, product discontinuation, or seasonal clearance, your pricing actions are seen and heard by your customer.

Is your markdown approach to just move out inventory?

Today with price optimization software, one can review the impact of a strategy to move inventory, capture sales, or a blend of both. Many organizations just use markdowns as a way to move out the final inventory, when really one can make better fact based decision regarding different markdown cadences (steps, dates, and prices) and a forecasted capture rate (percent of the original retail value) of the inventory sell through. So, don’t sell yourself short!

Are you taking advantage of localization?

Most organizations just set a national price point to certain types of merchandise as a way to reduce store effort at the shelf level. For some products, this approach could be the best, yet for most products, knowing the inventory position, consumer demand, and each product’s elasticity at that location could yield much stronger performance.  Developing a markdown pricing approach that takes this localization into account can help drive from selling our products short to driving better bottom line.

Are you measuring and managing your results to meet the financial budget?

Many of the markdown mechanisms are used to just meet the budget given and little fact finding to verify the viability, sort of a “this historical performance with some management percentage added in”.  With what-if simulation, setting strategies, bringing in inventory positions, developing markdown specific price elasticities, a markdown event can be planned and more fact based.  As the event is in-flight, the actuals performance can be tracked and the event re-optimized based on localized changing demand patterns.  This yields real-time feedback and responsiveness.  In addition, measuring forecasted to actual performance against the budget, allows the discussion with management and finance to take on a whole new meaning.

In summary, your markdown strategy can be enhanced with markdown price optimization to turn “final clearance of inventory” into a driving revenue capture pricing action.

Learn more about Revionics’ Markdown Optimization solutions.

Category Management is undergoing a quiet revolution. Gone are the days when a category manager could trust in intuition and experience alone. The new generation is embracing Retail Science to make better price, promotion, merchandise and assortment decisions. Retail Science applies sophisticated data analysis to help better understand what customers want. Data sources include Point-of-Sale (POS), Transaction Log (TLOG), competitive pricing, panel, syndicated, weather, demographic, and location attributes. Data cleansing, quality assurance tests and outlier analysis are essential for measuring causal relationships. The result is a demand model that accounts for price elasticity, promotional lift, merchandising, seasonality, cannibalization, affinity, space, and assortment. Category managers use this demand model to evaluate and compare scenarios. For example, a supplier may offer a incentive to promote Cheerios. The category manager can evaluate the category profit accounting for vendor incentives, cannibalization, and affinity.  This analysis shows how cannibalization of private label erodes category margin. Even the impact on loyalty customers can be evaluated in terms of basket size and trip frequency by customer segment.

Other examples where Category Managers are leveraging Retail Science include:

Store-Zone Clustering.  Stores in proximity to competitors, population density, household income, median age, and other factors influence customer behavior and sensitivity to price. Store zone clustering identifies the optimal store zoning and can improve profit by 1% of sales for some retailers (higher profits have been realized and this benefit is above and beyond that from price optimization alone). This analysis is based on category-store price elasticity and takes into account demographic data, competitor data, and store attributes. The principal components driving a store into one cluster versus another are evident from this analysis.  For example, zone one may be characterized by highly price sensitive, middle-income, densely populated, customers with a given ethnicity ratio and strong competition from Walmart within 2.5 miles. The strength of each of these factors in driving a store into a given zone is evident from the analysis.

KVI Items. Key Value Items (KVI) have the greatest influence on customer price perception and represent an important segment of a retailer’s business. Frequently, just 10% of a retailer’s items account for 90% or more of customer price perception and have the greatest influence on traffic. These items can come from many different categories and there can be multiple groupings. Examples include highly sensitive items, competitive items, traffic drivers, and basket builders. Retail Science can be applied to identify the top KVI items combining item profit and sales with price elasticity, market-basket analytics, and syndicated data. Understanding which items are the “true KVIs” and positioning them aggressively yields the most return while allowing the freedom to price non-KVI items in line with margin targets.

Pricing. Price elasticity relates the change in units to the change in price as indicated in the table below.

Price Elasticity      Price Change      Unit Change

1.0                          -10%                     +10%

2.0                          -10%                     +20%

0.5                         +10%                        -5%

Retailers can realize more profit and sales by increasing the price on items with low price elasticity and decreasing the price on items with high elasticity. The first step is to identify the category role and strategy. For example, some categories are identified as Convenience, Traffic Drivers, Margin Enhancer, and Turf Protector in this source from AC Nielson:

Consumer-Centric Category Management.  Hoboken: John Wiley & Sons, Inc., 2006

Willard Bishop is especially strong in working with retailers to identify how best to define category roles and map those roles into strategies that can leverage Retail Science. These strategies and the science account for Private Label to National Brand Gaps, Good-Better-Best relationships, Ending Numbers, Price Chance Frequency, Minimum/Maximum Price Change rules, Price-Per-Unit relationships, Margin Targets and Competitive Price Index. Competitive prices can be collected or purchased from Rival Watch.

Promotion. Promoting the wrong product or the wrong offer erodes category profitability. As mentioned earlier, Retail Science can be used to evaluate supplier incentives. It can also be used to recommend the best items to promote and at what offers. During the planning stage a Category Manager can use the Demand Model to evaluate “what if” scenarios. For instance, which is the best item to promote on the front page in a major feature? What is the impact of merchandising the item in an end cap or a display? Is BOGO better than 10 for $10?  In all of these comparisons the Retail Science accounts for supplier funds, cannibalization, and affinity.

Category Managers are now using Retail Science to segment loyalty customers and identify the best one-to-one offers that will drive basket profit and trip frequency. Market Basket Analysis is applied to identify item-level affinity to understand how much a promotion on meat will drive sales in produce.

Retail Science benefits Category Managers best when it is imbedded in tools that support Supplier Collaboration and Ad Planning including pre-press layout with integration to publication tools such as Adobe InDesign or Quark.

Markdown. Simple clearance strategies such as 25%, 50%, and 75% markdown spread across three months leave money on the table. Too often items are marked down when demand is sufficient to clear inventory. Similarly, there are items with large inventory that require deeper or earlier markdown to maximize profit. Retail Science identifies the best markdown amounts and dates. Category managers can specify strategy objectives such as clear inventory or maximize profit. Coherence rules can be applied to simplify signage and shelf tags.

Assortment & Space.  Space and price are inseparable. Suppose that demand is high for a particular item, so high that the retailer often has a whole in the shelf. Is it better to increase the price, or to add another facing?  Retail Science can be used to jointly optimize space and price. In some cases the recommended number of facing is zero—meaning that it is recommended that the item be removed from the assortment. Retail science can also leverage syndicated data from IRI to recommend new items to add to the assortment. At a macro level, categories that need more or less linear space are identified.

Price, Promotion, Markdown, Assortment, and Space impact category profit and sales. A single Product Lifecycle application that integrates all of these applications is extremely useful to Category Managers. For one, a single integrated platform can identify and resolve pricing conflicts. Such as, a 10 for $10 promotion on August 1 would be in conflict with an Everyday price change from $1.19 to $0.89 on July 25. An integrated platform can also provide a single unified forecast which can be compared with the financial plan and actual profit and sales.

At Revionics we specialize in a SaaS-based Product Lifecycle platform that is putting the power of Retail Science into the hands of the next generation of Category Managers.

One common characteristic I have found with many retailers that I have worked over the last six years is that category managers spend far too much of their valuable time on price maintenance.   Strategy often takes a backseat to other priorities such as shifting costs and competition.  In many instances where the category managers have pricing analysts to assist, the majority of their time is spent on price oversight and approval as well as negotiating promotional events with vendors and still not strategic.

When you consider the tasks and processes involved in price management, a 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, a simple cost changes prove to be a very time consuming challenge.

Over the last ten years many retailers have looked to life cycle price management and optimization vendors to automate these price management processes.  This technology has been embraced by several leading retailers and help to further cost justification of price optimization. Through use of a price optimization system, these retailers have found that their category managers can shift their focus to work more closely with their vendors. Time spent previously managing tactical tasks can now be dedicated to strategic pricing practices. Additional time saving benefits can be gained when implementing vendor collaboration software.

When I work with a retailer evaluating price optimization, I almost always recommend a “crawl, walk, run” approach when evaluating life cycle price optimization solutions.  Just because the system can optimize pricing does not mean it has to Day One. Start easy with automation.  Once users become more comfortable with the system functions and navigation, then try optimization for few categories and monitor the benefits. When confident of the systems benefits, the pricing team can decide to roll out price optimization across all categories, or go even further and investigate promotional and clearance or markdown optimization.

While the sizzle of an optimization solution is the science, there is a great deal of value provided by automating pricing tasks.  Ask yourself this question the next time you are dealing with price management functions “Is there something that I can be doing to better my category performance and make my pricing activities be more strategic?”

Are you satisfied with your gross margin and sales per square foot? If not, consider putting the customer first by adopting consumer-centric technologies for pricing.  In “Putting the customer first“, Susan Boyme emphasizes how important it is to “evaluate price elasticity and tailor pricing across specific regions and individual stores.” Revionics is working with Insight-out-of-Chaos to taken customer centricity to the next level by identifying the best items to promote by customer segment. Loyalty data was analyzed in terms of basket profit and trip frequency. While the revenue and profit per basket of loyalty shoppers were found to twice that of non-loyalty shoppers, it was surprising to learn that loyalty shoppers as a whole vary widely in shopping frequency and basket profitability. It was evident from the analysis that there is a large opportunity to increase increase basket profitability and shopper frequency by targeting incentives to specific customer segments. At the same time retailers can build customer loyalty in their VIP shoppers through customer centric offers.

Our research found that basket profitability and trip frequency are largely independent, which fall in contrast to recently reported results from Mark Aguiar and Erik Hurst at NBER. Their research using AC Nielson Home Scan data suggest a “doubling of shopping frequency lowers prices paid for a given good by 7 to 10 percent. Using this elasticity and observed shopping intensity, we can impute the shopper’s opportunity cost of time. Our imputed measure tracks the life-cycle profile of wages rather closely, particularly after middle age.” Their research is presented in “Home Production, Consumption, and Labor supply” at http://www.nber.org/reporter/2009number4/2009no4.pdf.

The authors report finding “elasticity of substitution between time and market goods in home production of roughly 1.8. Food expenditures fall dramatically after the age of 45 while our estimates of actual food intakes increase slightly after middle age. We find that roughly 10 percent of the decline in food expenditures after middle age is attributable to lower prices paid because of an increase in shopping time.

Revionics results were from a high-end retailer, which may explain the discrepancy.

Market basket data was analyzed to identify affinity relationships. The best items by customer segment were identified to drive profitability and trip frequency. In this case, meat and seafood were strong drivers of both basket profit and frequency. Cheese, coffer, and tea were good candidates for basket builders and prepared foods helped drive trip frequency.

The analysis requires an understanding of cannibalization as well as price elasticity and affinity. When these relationships are understood, retailers can make better decisions about what item to promote at what price to specific customer segments. For more information, please email Revionics at info@revionics.com.

Price optimization works best when the retailer is confident in their pricing strategy for their business and the product categories they carry.  For this reason, we chose to blog about the importance of defining category role when approaching any pricing initiative – whether your initiative is around everyday price optimization, promotion planning, and markdown optimization.

The industry standard model for Category Management is an 8 step process. The 8 steps are:

1.    Define the Category (i.e. what products are included/excluded).
2.    Define the role of the category within the retailer.
3.    Assess the current performance.
4.    Set objectives and targets for the category.
5.    Devise an overall Strategy.
6.    Devise specific tactics.
7.    Implementation.
8.    The eighth step is one of review which takes us back to step 1.

First, we will focus on the importance of step 2 in building an optimal pricing strategy.  Defining the role of the category within the retailer is really done by defining what is important to your customers, and knowing what is important to your customers is critical in defining your pricing strategy.  There are ways to get to this information in your historical sales data by measuring key metrics to truly define what is important to your customers.

Once you’ve defined your category roles you can then set a pricing strategy for each role.  That way you are pricing all of the items that are most important to your customer according to desired outcome.  Your customers will be happy if the items important to them are priced correctly and reward you by coming back.  Some things to consider would be the competitive position of each of those roles, elasticity of the products in each role, and goals for each category role.

In addition to the Revionics Life Cycle Pricing Solutions, our Business Consultants are available to help our customers identify and shape the roles of their categories.  Category Role Definition is one of our more popular services, as retailers fight to keep share of wallet while protecting margins.  Category Role Definition includes determining the proper category role and subsequent strategy based on elasticity, demand forecasting, and promotional lift from your historical sales data.  Revionics can then directly implement those strategies within our Price Optimization solution by configuring the system to reflect the retailer’s strategy.  For more information please visit www.revionics.com or email us at info@revionics.com.

If any of us had a crystal ball, we would most likely be enjoying a relaxing life somewhere, as we would have foreseen the recent changes in our economy and been better prepared to weather the storm. But since most of us are not privileged to that mystical tool, let’s talk about a few things we should all have on our immediate radar and be planning for as we look to the coming months.

1. Stabilization of the economy: Even though home prices are still slumping, and the jobs picture is only seeing slight glimmers of hope on the horizon, it appears that the worst recession in 70 years is behind us. Retailers that have been able to manage inventory and pricing through this turbulent time are well positioned for the future. As the economy begins to gain momentum over the coming months it will be important for retailers to continue focusing on KEY elements of their business that have defined them to their customers. Things like value proposition, loyalty, service, and value-added benefits need to be safeguarded and used as spring boards into the future. The ability to engage in predictive analytics or Future Planning will be paramount as we exit this economy. Being able to create “what if” scenarios in a real-time environment, such as is possible with Revionics Planning will allow retailers to keep ahead of the curve.

2. Shifts in consumer behavior: According to IRI’s recent FMI Economic Trend analysis for 2010 – “Consumers began embracing a range of money-saving strategies as means to survival earlier in the recession. They have quickly become engrained, and all indications are that consumers will continue with these tactics for the foreseeable future.” Consumers have become very value oriented. It is important to remember that value is an equation, not just a price point for the majority of customers.

3. New directions for private label: More consumers across ALL income and age segments are trying private label and recognize the total value of these brands vs. name brands. In the food segment alone, retailers have enormous upside potential in private label initiatives that encourage trial and repeat purchases across food and nonfood categories.

One of the key components to future success is a resetting of their current paradigm to a mentality of leadership rather than that of a follower. This takes a forward-looking approach, using predictive analytics created from and supported by their individual consumer demand indicators. Retailers must continue to evaluate their offerings through the filter of value proposition to their customers. Brand consolidation, based on eliminating confusion within a segment, will allow for better placement of private label offerings for continued penetration and profitability. Product planning, including an understanding of the role and interaction of each product, is critical to achieving maximum success at the enterprise level. Penetration of private label offerings, as well as maximizing the national brand potential, are both tied to this very important effort. Merchandising and advertising tactics that help build the brand in-store will be needed to maximize success in the future.

4. Potential shifts in store cluster dynamics: With virtually all demographic and socioeconomic lines impacted by the economy, what held true for retail store clustering a few years ago might not be true today. Stores that have traditionally catered to an infinite flow of disposable income are today seeing higher redemption of coupons and greater dilution from ad shopping than ever before. Specialty departments are suffering or are being closed in many of these stores. Revionics Consulting group can assist retailers in determining if their current zone structure is relevant with the recent changes. We can assist in determining if current stores are in the correct clusters and if the appropriate number of zones are being used to maximize profitability.

5. A balanced approach to promotions: With the consumer focus on value, and manufacturer’s willingness to invest in promotions rather than cost reduction, we have just gone through one of the most promotionally intensive time frames in recent retail history. While price and promotion have become a bigger differentiator than ever before, a merchant’s ability to control the MIX of prices through optimization and promotional pricing tools will help keep margins on target. The ability to evaluate the effectiveness of promotional offers and their impact on lift, affinity, cannibalization, and contribution to profitability at both the category and enterprise levels is crucial. Strategic pricing, both everyday and promotional, supported by technology continues to be recognized as an enormous opportunity for retailers. An integrated approach to all aspects of the pricing lifecycle, such as is offered by Revionics, will be critical in making the most of the pivotal time ahead.

Even though the immediate future still appears rocky, there does seem to be a brighter future just around the corner. Revionics stands ready to assist retailers in navigating these emerging waters with its full suite of lifecycle pricing tools and consulting resources.

Revionics’ mission is to increase retailer profitability by enabling better management of price, promotion, markdown, inventory, assortment & space. Revionics is unique in that we offer an integrated solution that shares a common demand forecast across all of these functions. In this article, I answer the question, “Why is an integrated solution better than individual point solutions?”

First, let’s cover some basics. A demand forecast is more accurate if it accounts for all price, promotion, and markdown activities. For example, demand will increase during promotions. In addition, the demand forecast must account for seasonality including holiday lift, day of month, and special events. Finally, the demand forecast must reflect cannibalization and affinity. For example, we’ve seen promotions on Campbell’s Tomato soup cannibalize Chicken Noodle and drag along sales of Kraft American Cheese used to make toasted cheese sandwiches.

Second, let’s not confuse a demand forecast with a sales forecast. A demand forecast estimates how much you might sell, while a sales forecast estimates how much you will sell. Why is there a difference? In short:  assortment , space and inventory. Let’s take an example:  Suppose that the demand forecast for Tide Detergent is 30 units in a given store for a given week. However, the assortment planogram allows just one facing with a shelf capacity of 7 units. The workforce plan calls for the shelf to be replenished every three days. At most you can sell only 21 units during a given week. The sales forecast must be lower than the demand forecast.

Let’s consider just pricing for a moment. Suppose we are modeling and optimizing prices in a category. The prices will be implemented in the store in six weeks. Optimization recommends decreasing the price on Hefty Recycling Bags. However, the assortment plan shows that these bags will be discontinued in 8 weeks. An integrated solution won’t waste the price change on an item that is being discontinued—a point solution would.

When it comes to assortment and space planning, integration with price, promotion, and markdown is easy to justify. Any item that is discontinued from the assortment should automatically go on markdown. Assortment and space optimization depends on price and promotion. For example, an item may be eliminated from the assortment if its price is high, but at a lower price, it might make the assortment cut. An item may have enough facing for everyday pricing, but what if the item is promoted frequently. Then the shelf space should be supplemented by either an end cap or a display. Or, suppose an item does not make the assortment cut, until one considers the lucrative vendor incentives received for promoting that item.

There is also the argument that if the demand is so high that I keep running out, I may either want to increase price, or increase the number of facing. Which is the best choice? Only an integrated solution can provide the answer.

There are several examples where Inventory optimization depends on price and promotion. Everyone knows that promotions can have a huge impact demand and consequently on order quantity. To a lesser extent, the same is true of base price changes. But does everyone understand how a promotion might cannibalize sales. For example,  an general merchandise retailer might have a location with only 25 packets of Fruit of the Loom t-shirts on the shelves.  Normally this would not be enough, but due to a promotion on Hanes t-shirts, the cannibalization of Fruit of the Loom means I have more than enough.

Another consideration is avoiding vendor disconnects. For example, suppose a vendor offers an incentive and the retailer runs a promotion. The vendor may have planned for 100 cases but the retailer’s demand forecast is 200.  If the vendor doesn’t have the supply to meet demand, the retailer suffers lost sales. This can be avoided by sharing the demand forecast with the supplier thru the Revionics Collaborate, our Supplier Portal.  Here, the retailer can share the promotion plan and the forecast with their trading partners, and the supplier can submit deals that are better tailored to meet demand expectations.

An integrated solution solves many problems for both the retailer and the vendor. While this all may seem too advanced, consider the pace of change in the world today. Revionics is actively driving change and delivering tomorrow’s solutions today.