Four Leading Retailers Implement Markdown Optimization from ProfitLogic in 2002
Contact:
Jakki Glivicky
ProfitLogic
617-374-5959
jglivicky@profitlogic.com
Markdown Optimization Becoming Significant Part of Merchandising Strategy for Top Retailers
January 13, 2003 - New York, National Retail Federation Show - In a year when retailers and technology companies alike struggled to maintain and improve their businesses, one retail technology niche thrived and created significant value for a growing number of leading retailers - Markdown Optimization. This technology solution helps retailers optimize the timing and depth of retail price reductions and has been an important area of focus for retailers. The main reason for this is that markdowns have taken on a more significant role in the retailing industry as supported by a recent STS Market Research study, which found that today 78 percent of all apparel sold is marked down.
ProfitLogic, whose suite of Retail Merchandise Optimization (RMO) solutions helps merchants make more profitable merchandising decisions while improving customer satisfaction, today announced that five retail customers are live and using Pricing4ProfitTM, the company`s flagship Markdown Optimization solution, to optimize pricing across their entire store base:
· Old Navy, a division of The Gap, the world`s #1 specialty apparel chain
· Meijer Stores, a $10B mass merchant superstore chain
· Casual Male, a $350M national specialty apparel chain
· Northern Group Retail, a Canada-based specialty apparel chain
These four retailers began implementing Pricing4Profit in 2002 to boost profitability and customer service by using customer demand information to drive markdown prices. The three most common reasons for implementing Markdown Optimization were:
· Significant and measurable benefits within months
· Fast implementation times
· Easy-to-use solution
Unlike other retail software solutions that can take up to two years or more to implement, Markdown Optimization implementations typically average 16-24 weeks and generate a positive return on investment (ROI) within the first year of use. Pricing4Profit generates, on average, a 5-10% gross margin dollar improvement for retailers. For a $1.5 billion retailer with $500 million in gross margin, that`s an increase of $25-50 million gross margin dollars per year. Retailers have also achieved 5-20% increases in inventory sell-through rates and have found that customers experience higher satisfaction due to in-season discounts (instead of after the season) and fresher assortments. Across the board, retailers are finding they can create competitive advantage by using ProfitLogic`s Markdown Optimization solution. They also agree that Pricing4Profit is a simple and practical solution that can be implemented with relatively minimal disruption to their current merchandising operations.
"ProfitLogic`s leading markdown technology has enabled the company to beat out many larger companies and win several high profile contracts (Old Navy, Casual Male, Northern and Meijer Stores) this year," wrote Brad Reback, executive director of equity research at CIBC World Markets, in a recent Software Bytes Newsletter. "Given this strong momentum and the growing interest in Merchandise Optimization at all levels of the retail industry, we expect ProfitLogic to have another strong year in 2003."
ProfitLogic offers scalable, Retail Merchandise Optimization (RMO) solutions that cater to the SKU-intensive needs of retailers whose top priority is getting the highest return on inventory investments, while at the same time satisfying their customer`s needs. Pricing4Profit, ProfitLogic`s flagship Markdown Optimization solution, is currently being used enterprise-wide at several leading hard and softline retailers. Two other products in the Merchandising4ProfitTM suite, Buying4ProfitTM and Allocating4ProfitTM, are currently being implemented at a Fortune 50 retailer. Together, these applications are the industry`s first comprehensive and integrated solutions that help retailers make optimized decisions for the entire lifecycle of their merchandise.
About ProfitLogic
ProfitLogic`s suite of Retail Merchandise Optimization solutions helps merchants make more profitable merchandising decisions by using intelligent tools that streamline and simplify the complex tasks of assortment planning, allocating, and promotional pricing. ProfitLogic`s customers, The Home Depot, Old Navy, JCPenney, Casual Male, Meijer Stores and Northern Group Retail have achieved quick ROI, increased gross margins, accelerated inventory productivity, and improvement in financial performance and customer satisfaction. For more information about Cambridge, Mass.-based ProfitLogic, call 617-218-1900 or visit www.profitlogic.com.
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