Pricing Association Sees Bright Future for Pricing Optimization Technologies Will Surface First in Retail Sector
Atlanta, GA (January 15, 2002.) The Professional Pricing Society, an association of pricing professionals that regularly tracks trends and issues in pricing and pricing technologies commented today on the increasing adoption of revenue management technology in the retail sector. In a year that forecasters warn will be tough for technology investments in most industries, retail IT executives may be the exception. In efforts to entice customers to buy, many online and traditional retailers are continuing to offer deep discounts and hefty markdowns to the detriment of already slim margins. As 2002 takes hold, retail CEOs are rethinking pricing strategies, and considering revenue optimization technology investments to help boost revenues and profitability.
"In other industries such as travel and lodging, revenue management and price optimization technologies have helped companies increase margins and net income for several years, said Eric Mitchell, President and CEO of the Professional Pricing Society (PPS) which has over 1,000 member pricers and pricing executives world wide. " We`re seeing more new pricing technologies at our conferences and among our vendor membership targeted at the retail industry. Retail is one industry where the benefits of precise price optimization of individual SKUs can pay big dividends. Excel spreadsheets, manual calculations, and human intuition are the way most retailers set prices today. Retailers are beginning to understand the potential of optimizing pricing strategies using technology solutions that tell them what their customers are willing to pay."
In a December 2001, report entitled "Retail Revenue Management," Forrester Analyst Carrie Johnson reported on the technology adoption process and the vendors that are helping retailers optimize prices. "Revenue management systems that optimize prices to increase margins will curb bad pricing decisions. Retailers will then integrate revenue and supply chain management to make prices even more precise." said Johnson. She also warns that the adoption process is still early, and predicts that the apparel and general merchants will be among the first to adopt revenue management technology and integrate it into supply chain management.
While he is optimistic about the value of retail revenue management, Mitchell agrees with Johnson. "The adoption rate may be gradual," said Mitchell. "With any new pricing technology, there is a ramp-up period when the skills and processes have to align with the strategies and the systems. Revenue management and price optimization will require enhanced skills for retail operations. One of the roles of PPS is to provide the training and workshops for its members to ensure that they build the skills and the knowledge make the right pricing decisions."
About PPS
The Professional Pricing Society (PPS) is dedicated to supporting decision makers and management personnel responsible for establishing pricing and pricing policies. Founded in 1984, PPS provides educational and consulting services to help its members develop sound pricing through conferences, workshops, publications, consulting services, an educational Web site (http://www.pricingsociety.com), and an active Internet discussion group. PPS works with industry leaders in over 50 countries; serving Fortune 1000 and Global 2000 manufacturing and service industries, including computers, telecommunications, industrial equipment, and retail businesses.
Contacts:
Deborah Vollmer Dahlke
Professional Pricing Society
Phone 770-509-9933
Fax 770-509-1963
Email dvd@pricingsociety.com
3277 Roswell Rd., Suite 620
Atlanta, GA 30305
www.pricingsociety.com
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