Price Optimization

When do holiday gifts become holiday bargains? Retailers have often wrangled with the perennial question of when to drop prices during the crucial holiday shopping season. This year, more retailers than ever before -- J.C. Penney (www.jcpenney.com), Gap (www.gap.com) and Circuit City (www.circuitcity.com), to name a few -- used price optimization software to help them determine when to start discounting.

Price optimization systems have their roots in the technology that airlines have used for many years to set ticket prices.

What price optimization programs from companies like ProfitLogic (www.profitlogic.com), Spotlight Solutions (www.spotlightsolutions .com) and Khimetrics (www.khimetrics.com) told retailers this year was that they needed to start slashing prices early. "The conventional wisdom is don't buy until after Christmas," Paula Rosenblum of AMR Research (www.amrresearch.com) recently told The Wall Street Journal. "The answer now is buy early and often."

Price optimization software is also helping retailers make pricing decisions based on the big picture, rather than focusing on individual products. For example, the sophisticated algorithms can show retailers the potential results if the retailer drops the price of a CD to lure in teenagers to purchase more profitable apparel items.

What's New In…

PRINTERS Avery Dennison Printer Systems Americas (www.averydennison.com) entered the desktop printer arena with a 6-inch-per-second label printer. The new printer is designed for on-demand retail, shipping/receiving, warehousing and general product ID applications. The printer, called the Avery Dennison AP 3.4, is the company's first product entry specifically designed for on-demand desktop labeling applications.

Alliances Lands' End (www.landsend.com) said it will offer merchandise on Amazon.com's (www.amazon.com) new Apparel & Accessories Store. Lands' End will offer more than 1,500 products, including top sellers such as the cotton Drifter Sweater and the Classic Squall Jacket.

Oracle Corp. (www.oracle.com) has become a member of the "Partners In Sync" Alliance Program. Oracle will enable retailers and their suppliers to connect to UCCnet's (www.uccnet.org) Foundation Services and access current product data in communicating with trading partners.

KB Toys (www.kbtoys.com) will be the exclusive toy supplier for CVS' (www.cvs.com) 4,000-plus locations beginning in 2003.

Supply-chain execution technology provider Manhattan Associates (www.manh.com) plans to acquire Logistics.com (www.logistics.com). The anticipated acquisition will combine Manhattan's supply-chain execution technology with Logistics.com's transportation execution and procurement solutions for shippers, as well as optimization technology for carriers.

Nonstop Solutions Inc. (www.nonstop.com), a provider of replenishment optimization software, acquired Evant (www.evant.net), a planning and merchandise management systems vendor.

Installations Sears, Roebuck and Co. (www.sears.com) has entered into agreements to purchase equipment from Itronix Corp. (www.itronix.com) and Wireless Matrix Corp. (www.wirelessmatrixcorp.com) to build a system for the retailer's product repair services organization. Sears will purchase 10,000 of Itronix's GoBook semi-rugged computer laptops and 10,000 of Wireless Matrix's Mobile Base Stations and wide-area wireless communications solutions. Rollout of the new equipment will begin in early 2003. Terms of the agreements were not disclosed. "Itronix and Wireless Matrix were able to meet both the unique business needs of Sears and the rugged, wireless requirements of the in-home product repair service technicians," says Mark Good, executive vice president and general manager for Sears' product repair services business. "This gives us an opportunity to improve the already high quality of service we provide our customers, reinforcing our goal to be the leader in in-home product repair services."

Wawa (www.wawa.com) has begun the installation of Triversity's (www.triversity.com) Transactionware Cypress POS solution to handle its growing fuel business, help speed credit transactions and provide a platform for future growth at its more than 500 stores in the Northeastern U.S. Triversity's Transactionware Cypress division is the provider. The solution, which is deployed on the Wincor Nixdorf (www.wincor-nixdorf.com) Beetle/S platform running Microsoft (www.microsoft.com) Windows 2000, is installed at more than 100 stores so far and the rollout will be completed in October 2003.

Ace Hardware (www.ace.com) will begin using item registration and data synchronization services from UCCnet (www.uccnet.org) in early 2003. The retailer, which has 5,000 independently owned and operated stores worldwide, works with 2,400 suppliers who provide 65,000 products to Ace retail stores. Ace Hardware and JDA (www.jdasoftware.com) have partnered to develop and deploy the new JDA Portfolio Collaborative solution, the Electronic Dynamic Agreement (eDA). Developed in cooperation with Ace Hardware, eDA can generate a retailer's order forecast for a supplier beyond the standard single order lead-time as far as one year into the future.

EXECUTIVE SUITE Shaw's Supermarkets (www.shaws .com) promoted Paul T. Gannon to president and CEO, replacing the retiring Ross McLaren. Gannon started his career at Shaw's in 1990 as VP of information technology services and most recently held the position of president. He worked at Andersen Consulting prior to joining Shaw's.