Executive Briefings

Profit in Price-Optimization Software Eludes Its Vendors, for Now

Price-optimization software is just beginning to make its mark. Although major software providers such as SAP AG and Oracle Corp. have joined the market, analysts estimate no more than 150 retailers worldwide are using it--including such big names as Wal-Mart Stores Inc. and 7-Eleven Inc. The CEO of Albertson's grocery stores told analysts in 2005 that the chain was reaping "big dividends" after pricing software advised charging less for such items as paper towels, toilet paper, ketchup and soup.
For now the software is enough of a competitive advantage that chains are reluctant to publicize their experiences. Still, it's clear that price-setting software and similar, more-established technologies such as markdown optimization figure to make stores more efficient and savvy at promoting precisely what consumers want. Or at least what we think we want.
Source: CIO Today, http://www.cio-today.com

Price-optimization software is just beginning to make its mark. Although major software providers such as SAP AG and Oracle Corp. have joined the market, analysts estimate no more than 150 retailers worldwide are using it--including such big names as Wal-Mart Stores Inc. and 7-Eleven Inc. The CEO of Albertson's grocery stores told analysts in 2005 that the chain was reaping "big dividends" after pricing software advised charging less for such items as paper towels, toilet paper, ketchup and soup.
For now the software is enough of a competitive advantage that chains are reluctant to publicize their experiences. Still, it's clear that price-setting software and similar, more-established technologies such as markdown optimization figure to make stores more efficient and savvy at promoting precisely what consumers want. Or at least what we think we want.
Source: CIO Today, http://www.cio-today.com