Best Buy Plugs into Demand Management 09/27/04

In an ideal world, wars would be fought by politicians in board rooms, professional athletes would play for the love of the game and not the love of money, fast food would be good for you, and summer vacation would not only apply to school kids. While a modern-day utopia is still a ways off, retailers are making it easier to find what you want, when you want it, at a price you can afford.

Take Best Buy, for example. The consumer electronics retailer generated more than $24 billion in revenue in its fiscal year ending February 2004, nearly doubling its revenue during the last four years. The retailer recently launched a company-wide initiative to deeply understand and more broadly satisfy the needs of its customers across a variety of segments.

As part of the initiative, Best Buy plans to implement DemandTec’s Consumer Demand Management (CDM) merchandising optimization software chain-wide. The specialty retailer will utilize CDM software to align merchandising decisions for each of its 600-plus stores nationwide with a greater understanding of consumer demand in order to achieve revenue, volume, and profitability objectives.

The CDM application offered by DemandTec includes DT Price, DT Promotion, and DT Markdown. Together, these applications allow the retailer to optimize and manage merchandising decisions and activities across the complete product lifecycle, from new product introduction through end-of-life. These applications are supported by the DemandTec CDM platform with DT Openlink integration technology, providing a single view of consumer demand and automated integration with legacy systems and data repositories.

For most retailers, mismatches in supply and demand often result in missed sales opportunities, lost profits, excessive expediting costs, lost market share, and poor customer service. In order to maximize sales and marketing effectiveness, companies must accurately predict future customer demand and use this information to drive their business, from manufacturing to inventory planning, distribution, and allocation.