Longs Drug Stores Implements DemandTec 3 Software
Leading Drug Store Chain Sees Results with DemandTec 3
SAN CARLOS, Calif. – June 25, 2002– DemandTec Inc., the leading provider of Demand Based Management (DBM) software, announced today that Longs Drug Stores Corporation (NYSE:LDG) has selected DemandTec 3 , to set price and promotion combinations that will optimize sales, profit and price image for more than 400 of its stores.
"We’ve looked at several different metrics associated with our relationship with DemandTec. We’re about a third of the way through our roll–out and our approach has not necessarily been the same with every category," said Terry Burnside, Chief Operating Officer at Longs. "We have certain categories that are core to our retail drug business, and we’re using the price optimization system to balance moving sales and synergy with other categories in the store with driving margins."
Longs is one of the leading drug store chains in the United States, with more than 440 stores and annual sales in excess of $4 billion. The company has grown its business in part by generating strong customer loyalty. The implementation of DemandTec 3 price optimization phase of the company’s supply chain initiative is helping the company move customers in two directions: driving additional sales and driving additional margins.
"DemandTec 3 will enable Longs to generate results based on its corporate business objectives, allowing them to improve company–wide performance," said Dan Fishback, president and CEO, DemandTec. "Longs is a company that cares about its customers and innovates with technology. Its focus on the customer experience fits very well with our mission to deliver Demand Based Management."
DemandTec 3 analyzes consumer buying patterns in Point of Sale (POS) data to help retailers accurately forecast price and promotion sensitivities for every item in every store, and execute strategies that meet financial objectives. With DemandTec 3, retailers can forecast the impact of their promotion calendar with DemandTec Promotion , and integrate the projected promotion results into DemandTec Price , which generates base prices and business forecasts.
"Longs’ experience will educate the financial community on synergies between Retail Revenue Management and promotional marketing. That executives had to point out that price optimization means decreasing prices on some items while increasing prices on others shows where that community’s understanding of demand–based marketing stands. The several references to price optimization demonstrate Longs’ confidence in DemandTec’s core business, a signal other smart retailers will follow."
–Greg Girard, VP of Retail and Supply Chain Strategies, AMR Research Alert on Retail May 30, 2002.
About Longs Drug Stores
Longs Drug Stores Corporation is one of the leading drug store chains in North America, with annual sales per store averaging approximately $10 million. Founded in 1938, Longs today operates 443 stores in California, Hawaii, Washington, Nevada, Colorado and Oregon. Longs focuses on meeting the specific health and well being needs of its communities with superior pharmacy service and convenient product offerings that include over the counter medications, photo and cosmetics. On–line prescription services, merchandise and health information are available at www.longs.com, and recently acquired RxAmerica provides pharmacy benefit management services for a growing list of clients.
About DemandTec
DemandTec’s Consumer Demand Management software helps retailers and consumer products manufacturers strategically plan, optimize, and execute demand–driven merchandising and marketing programs based on a quantified understanding of consumer demand. Retailers have ranked DemandTec #1 in Strategic Value, Customer Satisfaction, and Quality of Service among the top 50 retail software vendors in the 2004 RIS Leaderboard survey. DemandTec customers include B&Q, Best Buy, Brookshire Grocery Company, Duane Reade, HEB Grocery Co., Longs Drugs, Monoprix, RadioShack, and Safeway. DemandTec software is provided via the IBM On Demand program. For more information, please visit www.demandtec.com.
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