Progressive Grocer - November/December 2009 - (Page 106)

Technology Optimization Plus New vendor partnerships are extending the reach of price and promotion optimization software. By Joseph Tarnowski emandTec, Inc. this past July formed an alliance with Memphis, Tenn.-based category management consulting firm Winston Weber & Associates (WWA) to help retailers and consumer products manufacturers increase their focus on shoppers in their merchandising, marketing and supporting activities. “Optimizing merchandising and marketing to attract and engage the individual shopper has become the Holy Grail for retailers and manufacturers, and the work DemandTec and Winston Weber & Associates are doing together can help these companies improve their position in the marketplace,” says Winston Weber, chairman and CEO of WWA. “Our Shopper Centric Retailing nextgeneration merchandising approach is driven by insights that come from DemandTec solutions, and the collaboration with trading partners required to engage and satisfy shoppers is the basis of the DemandTec TradePoint Network. Our joint resources will help drive sales and efficiencies throughout the retail value chain.” The partnership combines WWA’s category management expertise — which focuses on strategic direction, organization and business process design — with DemandTec’s new nextGEN software services, which “help our customers enhance their ability to understand shopper behavior and define appropriate merchandising and marketing strategies,” according to Dan Fishback, president and CEO of San Carlos, Calif.-based DemandTec. Also this past summer, Florham Park, N.J.-based price-modeling and optimization solutions provider KSS Retail and brand-building consultancy dunnhumby formed a strategic alliance enabling dunnhumby to provide price modeling and optimization to its clients. • Progressive Grocer • November/December 2009 “Aligning with KSS Retail will allow us to increase our capabilities in the work we do with retailers and manufacturers, and help us provide an even higher level of relevance to the customer,” says Simon Hay, CEO of Cinncinati-based dunnhumbyUSA, a joint venture between The Kroger Co. and London-based dunnhumby. “It presents opportunities to further develop and customize our capabilities.” Both partnerships show how price and promotion optimization software has matured from a “magic black box” that warily raised retailers’ eyebrows several years ago to an accepted and profit-driving solution with many different applications — and undoubtedly many more to come. Price Op.com One new area for price optimization is the Web — specifically online-only grocers. New York-based online grocer FreshDirect this past September became the first Internet grocer to tap into the technology when it inked a deal with DemandTec to deploy a solution to provide shopper-centric analytic insights that support everyday pricing strategies and decisions. Long Island City, N.Y.-based Internet-only grocer FreshDirect, which serves more than 250,000 customers throughout New York City’s five boroughs, will employ the technology to define merchandising and marketing strategies that protect and enhance its customer price perception, and at the same time deliver positive business results. Fresh Direct’s deal with DemandTec demonA H E A D O F W H AT ’ S N E X T strates that the vendor isn’t just for large national chains — a common industry perception. Indeed, other regional and community-based grocers have been quick to adapt the technology. D’Agostino Supermarkets, another New York grocer, based in Larchmont, is deploying a price and promotion optimization solution across all 18 of its locations, to enhance its pricing strategies. The company is working with Sacramento, Calif.-based Revionics on the solution, which was developed to optimally determine base pricing, promotional and ad pricing, temporary price reductions, and markdowns, and is available as a Software as a Service (SaaS) subscription offering over the Internet. And, most recently, Seattle-based natural and organic foods retailer PCC Natural Markets, which operates nine stores in Washington state, revealed plans to deploy KSS’ Retail PriceStrat software to manage regular and promotional pricing, and enable it to model what-if pricing scenarios for both fresh and grocery products. To date, the only category of grocer that has yet to tap into price optimization is the single-store operator. But at the rate the deployment of the technology is going, that may not be far off at all. Senior Editor Joseph Tarnowski can be reached at jtarnowski@ progressivegrocer.com. www.progressivegrocer.com http://www.PriceOp.com http://www.progressivegrocer.com

Table of Contents for the Digital Edition of Progressive Grocer - November/December 2009

Progressive Grocer - November/December 2009
Contents
Nielsen’s Shelf Stoppers/Spotlight: All Departments/Ramen Noodles
Progressive Grocer’s Category Captains Awards: Recession Planning
Consumer Insights: Innovate to Differentiate
Independents Report: Determining Relative Worth
Lempert Report:The Trends That’ll be Tops in 2010
Store of the Month: A New Brand of Winn-Dixie
Beverage Alcohol: Glass Half Full
Sports/Energy Drinks: Energetic Sales?
Category Management: Categorical Shifts
Holiday/Super Bowl Meat Promotions: Bowled Over
PG’s Annual Deli/Bakery/ Prepared Foods Roundtable: Bringing Value to the Table: Part 2
Packaging Trends: Sheer Innovation
Price and Promotion Optimization Software: Optimization Plus
Signage: Above and Beyond
What’s Next: Editors’ Picks for Innovative Products

Progressive Grocer - November/December 2009