SAS Revenue Optimization Suite helps retailers alleviate profit-killing deep discounts
SAS introduces first solution in retail industry that optimizes pricing in all areas simultaneously
NEW YORK, N.Y. on 22 April 2005
In the world of retail, it’s no secret that the key to success is the ability to offer the right product to the right customer at the right price and at the right time. Until now, few retailers have been able to consistently achieve this rarefied combination. SAS, the leader in business intelligence, remedies this challenge with the introduction of SAS® Revenue Optimization, the only truly integrated revenue optimization product that helps retailers manage revenue and margin through the entire merchandise life cycle. This suite of integrated software solutions includes SAS Regular Price Optimization, SAS Promotion Optimization, and SAS Markdown Optimization.
“The ability to make optimal pricing and promotion decisions in the pre-season planning process and continue to adjust and optimize in-season is a significant step in improving retail profitability,” said Lori Schafer, president of Marketmax, a division of SAS. “SAS allows retailers to continually analyze the data, leveraging forecasting and optimization technologies and provides the retailer with profit opportunities not available before.”
SAS Revenue Optimization helps retailers maximize revenue and margins by precisely setting and managing regular prices, planning optimal promotions and executing the most successful markdown strategies, all within the context of total product life-cycle management. With the advanced data management, forecasting and analytic capabilities of SAS Revenue Optimization, retailers will no longer have to rely solely on gut instinct or historical analysis. SAS® Revenue Optimization Suite
Retailers face several common challenges today:
It is difficult to achieve the best mix in pricing, promotion and markdown activities to maximize margins given the breadth and complexity of product assortments.
One-size-fits-all pricing fails to account for product, customer- and market-level variations in the consumer’s response to promotions and markdowns. * There isn’t an easy way to maximize margin across a large number of stores and products.
SAS Revenue Optimization drives profitability by empowering retailers to:
Set and manage regular prices for products based on costs, regional demand patterns and competitive price information.
Create what-if scenarios to determine the incremental lift in demand – and, thus, revenue – from planned promotions.
Establish pricing strategies based on predicted margin contributions at category and item levels.
Create permanent markdown plans that maximize margin and eliminate unnecessary markdowns.
“SAS Revenue Optimization Suite allows retailers — for the first time — to analyze and optimize pricing in all areas simultaneously,” said Schafer. “In the past retailers were offered solutions that dealt with individual issues (e.g., promotional pricing or markdown optimization) and were not able to understand the dynamics among all the elements of pricing. It is virtually impossible to optimize one element of pricing unless all elements studied, forecast and optimized at the same time; this new solution provides retailers with this unique ability.”
SAS® Regular Price OptimizationSAS Regular Price Optimization helps retailers establish and maintain optimal everyday prices based on costs, regional demand patterns and competitive price information. This solution provides an intuitive interface to enable merchants, merchant assistants, category management teams and pricing analysts to make timely profit and revenue-maximizing decisions that consider operational constraints. Retailers will also be able to predict the impact of proposed price changes on revenue, unit volume and profitability or estimate the price elasticity of different items and groups based on sales, price or other causal data.
In addition to these other capabilities, SAS Revenue Optimization delivers customized reports that allow pricing information to be viewed by product or by location hierarchy with various performance metrics, including sales, revenue, margin and price changes per market.
SAS® Promotion OptimizationSAS Promotion Optimization lets retailers maximize margin and revenue by determining which items or groups of items to promote, in which locations, at what price points and via which promotional vehicles. Using SAS’ advanced demand modeling and mathematical optimization techniques, retailers can determine incremental lift from planned promotions, develop and implement optimal promotional plans, support inventory-planning decisions and maximize return-on-marketing investment. SAS® Markdown Optimization
With SAS Markdown Optimization, retailers have a new approach for effectively managing markdowns and improving profitability. Integrating the clearance plan into the pre-season planning process, studying the previous results and identifying current trends helps retailers determine which items should be marked down, how much they should be marked down, when and in which markets or stores. Retailers can base this analysis on critical factors, including; inventory levels, base sales volume, price elasticity and local demand or preferences. With this solution, retailers can develop and implement optimum markdown pricing strategies at the local market level to maximize revenues and profitability while meeting end-of-season inventory goals. Retailers are also able to analyze performance of previous markdown events and forecast the incremental lift from planned clearance events. Such forecasts help avoid stock-outs and overages, as well as unnecessary markdowns.
Built on a powerful foundationThe SAS Revenue Optimization Suite gets its power and speed from SAS®9, the industry’s leading business intelligence platform. SAS®9 (www.sas.com/sas9) provides comprehensive data management, business intelligence and analytic capabilities in an integrated set of products and solutions. This single platform results in significantly lower cost of ownership for any organization. Retailers can now create price, promotion and markdown plans at any level of detail desired — even to the SKU level at each store. In addition, the suite is fully extendable, meaning that organizations can plan strategically, stay focused and maintain a phased approach toward their specific revenue management goals.
The SAS Revenue Optimization Suite www.sas.com/industry/retail/rev_opt/ was announced at the NRF 94th Annual Convention and Expo.
SAS is the market leader in providing a new generation of business intelligence software and services that create true enterprise intelligence. SAS solutions are used at 40,000 sites – including 96 of the top 100 companies on the FORTUNE Global 500® – to develop more profitable relationships with customers and suppliers; to enable better, more accurate and informed decisions; and to drive organizations forward. SAS is the only vendor that completely integrates leading data warehousing, analytics and traditional BI applications to create intelligence from massive amounts of data. For nearly three decades, SAS has been giving customers around the world The Power to Know® .