SOLUTION OVERVIEW
SAS Revenue Optimization Suite
for Grocery
®
High-performance grocery: empowering grocers through
lifecycle pricing and grocery analytics
Overview
The grocery industry includes constant
challenges and opportunities – competition from unexpected places,
commodity price pressures, constantly
changing customer preferences, private label and margin opportunities,
complex supply chain, myriad vendor
offers and new product introductions
plus the grind of weekly ads. Often,
third parties are advising grocers on
what to sell, where to place it, how to
promote it, and what to do with masses
of customer loyalty data.
This data is unique to you and your
business and can be a competitive
advantage. How does a grocer make
sense of it all to create high customer
satisfaction, healthy revenues and
margins, profitable promotions and
long-term growth?
The SAS® Revenue Optimization Suite
enables grocers to achieve stronger
financial results – increased sales,
profitability and gross margins – by
proactively planning, optimizing and
implementing both regular and promotional pricing based on a thorough
understanding of consumers, demand
and the market.
Powered by a high-performance platform, the SAS Revenue Optimization
Suite gives you the unique ability to localize pricing and promotions based on
accurate demand forecasts for every
store and every item. This leads to true
competitive advantage in the intensely
competitive grocery marketplace, as
well as increased sales, margins, customer loyalty and market share.
Plan and Optimize
Pricing and Promotions
with High Performance
■ Key Benefits
• Increase sales and gross
margins through optimized
everyday and promotional
prices.
• Increase promotion profitability by targeting promotions
at local markets.
• Set the right price for every
product in every store by
setting pricing and promotions
based on accurate consumer
demand forecasts and precise
market intelligence.
• Identify opportunities to
adjust prices to boost the
profitability of individual
products as well as encourage
customers to shift from
purchasing low-margin
products to high-margin
products.
• Target promotions directly at
individual customers or
customer segments to drive
more profitable baskets and
increased customer loyalty.
• Maximize in-stock positions
by feeding promotional
forecasts to replenishment
systems.
• Optimize weekly circulars for
products, categories, banners
and locations that maximize
market basket profitability.
How SAS Can Help
SAS enables grocers to proactively
plan, optimize and execute pricing
and promotions with a comprehensive
understanding of consumer demand
and markets. Our high-performance
computing platform speeds time to
insight with unparalleled precision and
forecasting accuracy.
Integrated High-Performance
Demand Modeling and Forecasting
SAS’ high-performance demand
modeling and forecasting features use
the most powerful analytics available
to create a precise picture of customer
demand at the individual SKU/store
level. Your models continually “learn”
as data is refreshed, and they adapt
to shifts in consumer demand. Highperformance demand-forecast models
provide real-time insight by quickly
evaluating elasticity, affinity, cannibalization, cross-category and seasonality for
each store and each item.
Forecasting with higher accuracy and
precision provides the ability to create
the most profitable customer-centric
promotions by adjusting to consumer
preferences. The accuracy creates
more profitable market baskets, significantly improves in-stock positions and
enables more local assortments.
effect of a change on any parameter
(e.g., the effect of a price change on sales
dollars, unit volume and profitability).
Your scenario results will provide
you with an understanding of how
regular and promotional pricing affects
other items in a particular category and
across the store, allowing you to confidently set the optimal price and create
the most profitable basket.
You will be able to conduct vendor negotiations knowing how your customers
at each store will respond to proposed
promotions.
Optimization of Regular and
Promotional Pricing
Highly sophisticated but easy-to-use
optimization capabilities enable you
to strategically manage and optimize
price proactively (including perishable
and random-weight items) based on
competition, goals, business rules, tactics and ad placement at a customer,
market or store level. System-generated
alerts recommend price changes
based on market changes, allowing
more time to capitalize on new price
opportunities.
Predictive Modeling and
What-If Scenarios
It will become easier for you to determine the right items to offer at the right
prices, so you don’t discount items
unnecessarily and you ensure that the
items and prices you are offering appeal to targeted customers.
Real-time what-if scenarios enable you
to simulate multiple promotion options
so you can proactively evaluate the net
You will be better able to compare
the performance of different options
for both regular prices and promo-
tions, enabling you to make the most
informed decisions, create targeted
promotions aligned with customer segment goals on a local market level, and
optimize your weekly circular.
A High-Performance Analytics
Platform
Our high-performance analytics
platform runs significantly faster than
traditional computing platforms. For example, the system can compute more
than 160 million store/SKU forecasting
and optimization computations in less
than an hour.
Individual user forecasting can be
completed in seconds, which enables
analysts to evaluate more scenarios,
improving bottom-line results and
productivity and allowing you to get
optimization results at the point of
decision.
Components
SAS for grocery provides full lifecycle
pricing for retailers. It may be purchased as a suite, and most often
includes SAS Regular Price Optimization and SAS Promotion Optimization.
These include a built-in common demand forecasting and a modeling layer.
SAS Markdown Optimization is also
available to focus on seasonal items,
gift items and date-sensitive items.
Each retailer’s needs and path to
competitive advantage are different.
The SAS team will work with your team
to understand your vision, brand and
goals to determine best steps.
SAS® Regular Price Optimization
Powered by industry-leading demand
modeling and forecasting, SAS Regular
Price Optimization enables retailers to
create a demand-driven pricing strategy
that optimizes financial targets and
enhances customer loyalty. Our highperformance computing capabilities
speed processing and model calibration, enabling faster optimization and
evaluation of pricing iteratively and in
batches.
SAS Regular Price Optimization strategically manages and optimizes prices
based on competition, goals, business
rules, tactics and ad placement at a
customer, market or store level, including perishables and random weight
items. System-generated alerts recommend price changes based on market
changes, allowing more time to capture
new price opportunities.
High-performance demand forecast
models provide real-time insight,
evaluating elasticity, affinity, cannibalization, cross-category and seasonality for
each store and each item. The models
also evaluate the effect of planned and
approved promotions when optimizing
price, enforcing price change rules during promotional periods.
SAS® Promotion Optimization
Powered by industry-leading demand
modeling and forecasting, SAS
Promotion Optimization enables
retailers to deliver the most compelling
and profitable customer-centric
promotions. Retailers can easily
■ Challenges
• Reactive pricing and promotions. Setting prices based on
vendor recommendations, what
you did last year or competitors’ pricing – while ignoring
cannibalization and halo effects
across categories – can result
in missed profit opportunities
and lower customer loyalty.
• Rapidly changing inputs. Cost
changes, competitor movement,
consumer demand shifts and
vendor funding must be tracked
constantly to create pricing that
drives profitable traffic, satisfies
consumer demand and meets
corporate objectives.
• Lack of customer insights.
Despite the wealth of transactional, market and loyalty data
available, most grocers have not
gleaned valuable consumer
insights for everyday pricing
strategies – risking margin
leakage, decreased market share
and lowered customer loyalty.
• Poor forecast accuracy.
Without the ability to know, with
some level of confidence, the
effect of various pricing and
promotion decisions, it’s difficult
to make an informed decision.
• Lack of insight into promotion effectiveness. There is
typically no way to measure the
success of a promotion or
pricing policy, and that makes
it impossible to adopt best
practices or correct missteps.
manage and execute the optimal
selection of products and prices, driving
customer demand and transparently
measuring effectiveness. Additionally,
faster and more accurate evaluation of
promotions enables retailers to more
effectively negotiate vendor deals.
SAS Promotion Optimization uses
high-performance, store-level analytics
to deliver customer-centric promotions
that optimize promotional price and
circular placement, leading to an increased share of the customer’s wallet.
Additionally, by incorporating customer
intelligence, you can identify customer
segment relevancy and optimize direct
customer offers.
Automated recommendations account
for trade funds when selecting the
optimal product to fill ad spots in a
promotional vehicle or for an in-store
promotion, improving promotion
effectiveness and increasing profit.
Configurable workflows increase the
effectiveness of automated recommendations by enhancing collaboration
between merchandising and marketing
to align on calendars, events, vehicle
placement and customer insights.
Why SAS®?
Advanced optimization techniques.
While all vendors offer optimization
techniques, typically they only consider
the category or segment level, and
those “averages” are applied across
stores. SAS recognizes the flaw in these
approaches and is the only vendor that
provides the granularity and accuracy
of store/SKU level optimization. Based
on recent head-to-head comparisons,
SAS provides the highest level of accuracy to drive the most profitable pricing
and promotion scenarios.
The combination of highperformance analytics and a
scalable solution for grocers.
While many vendors offer pricing and
promotional solutions, only SAS brings
it all together in an integrated solution
that enables you to set and manage
regular prices and quantify the impact
of promotional activities to create
more profitable promotions targeted at
the local store level. The SAS solution is proven and scalable to meet
your growing data needs and shorter
response times. By quickly processing
large volumes of data at the store/SKU
level, SAS provides the accuracy and
granularity necessary to create optimal
pricing and promotion strategies.
Integrated customer insights and
marketing analytics.
SAS is the only vendor to integrate customer insight, transactional data and
external data, including social media
sentiment, to provide a comprehensive
understanding of your customers and
their attitudes toward your brands. With
SAS, you can integrate customer insights across the pricing and promotion
planning process and execute highly
targeted promotions.
About SAS
SAS is the leader in business analytics
software and services, and the largest
independent vendor in the business
intelligence market. Through innovative solutions, SAS helps customers at
more than 60,000 sites improve performance and deliver value by making
better decisions faster. Since 1976 SAS
has been giving customers around the
world THE POWER TO KNOW®.
The solution provides merchants the
ability to evaluate trade spending on
brands by vendor in weekly circulars or
by category, ensuring profitable promotion spending for current and future
events. Reports and embedded views
provide merchants powerful insights to
track trade spending by vendor across
circulars and by category over time to
enhance compliance and focus trade
spending on items that drive profit.
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