DemandTec Launches Breakthrough Pricing Optimization Service to Double Retailer Profits.
New Price Offering Unveiled at Leading Retail Convention
SAN FRANCISCO, May 3, 2001– DemandTec Inc., the leading provider of Demand Based Management (DBM) software, today announced immediate availability of its DemandTec Price™ service, which. provides breakthrough technology for grocery, pharmacy chains and other retail stores to set optimal price and promotion combinations based on consumer response. The new offering, available as a hosted software service for the first time allows retail executives to accurately match consumer preferences with product offers to maximize net profits and customer satisfaction.
DemandTec is the first price and promotion optimization provider that capitalizes on breakthroughs in consumer response modeling, activity–based costing (ABC) inference techniques, and intense computing power to deliver a solution that helps retailers fundamentally improve net profits by offering consumers the products they want at the prices they want to pay. DemandTec’s technology factors in point–of–sale (POS) purchase history, product attributes, promotions, and competitor pricing with patented economic methodologies to calculate optimal price points. These optimized price points are delivered to users in an intuitive, Internet–enabled interface. Based upon results from initial tests, DemandTec expects to be able to double net profits for retailers. Because DemandTec hosts the data, clients have access to a vastly powerful and secure database with minimal investment.
"The retail industry is in need of first rate business intelligence and technology if it is to increase profits – especially in light of the current economy," said Mike Neal, CEO of DemandTec. "Retailers now earn an average of 1.1% net margin – our value proposition is to give them the ability to double that."
Retailers are faced with an increasingly tough and complicated business environment that requires equally increasing levels of technical sophistication to stay competitive and profitable. Because of resource restraints, retailers now analyze only a small percentage of items to optimize prices. And even then, anecdotal experience, intuition and outdated purchasing history usually serve as the bases for these critical business decisions. Remaining items are priced at the chain level, which is inadequate for considering the true cost of doing business and competitive pressures at individual stores within the chain. The resulting inaccuracy in pricing causes retailers to miss substantial revenue–generating opportunities and to under–serve their customers. Through the deployment of Price, optimal pricing can be expanded to all items in a store almost immediately.
"DemandTec’s solution addresses an age–old problem of pricing, bringing precision science and deep industry expertise to the retail industry," said Larry Lowry, Senior Partner and Head of Consumer Products and Retailing Practice, Booz–Allen & Hamilton. "Their unique approach for managing net profitability fits the industry need of the top retailers and manufacturers in the country."
Pricing and Availability
DemandTec Price Version 1.4 is available immediately as a hosted service with monthly subscription fees based on revenue under management. DemandTec will be showcasing Price at the FMI Supermarket Industry Convention in Chicago, May 6–8, 2001. Retail executives are invited to test–drive the offering at the FMI Convention in Chicago booth N5945 or in the SuperTechMart Pavillion at McCormick Place. Presented under the theme, "The Power of e3," referring to the third generation of e–technologies, SuperTechMart offers a 30–minute tour that showcases technologies from DemandTec and other vendors that deliver bottom–line results for supermarket retailers.
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.
All trademarks or registered trademarks are property of their respective owners. |
