Survey Reveals That 70 Percent of Retailers Have Pricing Challenges Not Addressed with Legacy Systems
Retailers Using Legacy Systems Often Cause Margin Erosion and Diminished Customer Loyalty as Costs Increase
LAS VEGAS, NEVADA AND ROSEVILLE, CALIFORNIA, February 14, 2011: Revionics, Inc., a leading provider in retail life cycle price optimization solutions, today at the 2011 National Grocers Association (N.G.A.) Annual Convention
and Supermarket Synergy Showcase released results from a recently commissioned pricing survey of mid-size and large North American Retailers. Following recent and ongoing commodity and gas price increases, retailers surveyed are consistently seeking solutions to protect profits without negatively impacting consumer demand and price image. Retailers are seeking pricing solutions that alert them to items with high or low price sensitivity, giving them better transparency to how consumers will react to price changes.
Key survey findings include:
- Nearly 70 percent of respondents said they found it challenging to manage price changes due to cost changes, competitive indexing, and other-related factors.
- Over 70 percent of the respondents expressed doubt about the effectiveness of their legacy pricing tools within their organization.
- Over 60 percent reported that they lacked the tools to understand affinity or revenue cannibalization impacts of promotions on other products.
- Price planning and optimization initiatives were becoming increasingly important in the wake of cost increases.
Supermarket chains such as Revionics’ customer, Longo Brother’s Fruit Markets
, use Revionics price optimization
to scientifically automate weekly price maintenance such as managing cost increases. “Longo’s
is about providing value to our customer, so managing our price image is essential to our business,” stated Pat Pessotto, Vice President of Merchandising for Longo’s, “Revionics helps us to understand the collective impact of competitive activity, cost changes, and consumer demand, then recommends the best weekly price changes for our locations. Price optimization helps us to put our customers’ needs first.”
“Price optimization is a rapidly maturing technology, but we've found from our own research
that retailers still see enormous opportunity to drive margin benefits from price optimization solutions
,” said Nikki Baird, partner at RSR Research “Grocers in particular have been struggling with wild variations in commodity prices alongside catering to extremely cost- and discount-conscious consumers.” RSR’s current survey on pricing issues in 2011 is now collecting respondent data
“Experienced retailers recalling the impact of 2007 and 2008 cost increases recognize the limitations of legacy pricing technology and are actively looking for better solutions,” stated Marc Hafner, Revionics President and CEO, “By using Revionics, retailers can proactively and effectively manage cost increases while protecting profits and customer loyalty.”
For additional information on the survey’s results please visit our booth, #600 at the N.G.A Annual Convention or contact us to schedule an appointment
About Revionics, Inc.
Revionics delivers innovative lifecycle price optimization solutions to retailers, including everyday, promotion, and markdown pricing. The Revionics technology leverages an integrated forecast, enabling a coherent view of customer demand across all decision areas. Our proprietary approach, Revenue Bionics™, applies advanced analytics and science to predict customer behavior, empowering retailers to achieve their financial objectives, improve customer loyalty, and make better, faster decisions. Our solutions are delivered on a modern, fully scalable, pay-as-you-go, software-as-a-service platform. Over 20,000 retail locations across grocery, automotive, drug, building materials, convenience, general merchandise, and discount stores are priced using Revionics solutions.
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