Pricing Past, Present

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GROCERY PRICE LIFECYCLE BEST PRACTICES
Pricing - Past, Present Future Some
observations on the state of the industry
Bill Campbell, SVP of Sales, Grocery Segment,
Retalix
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Pricing Past, Present Future
Just the Facts Please

• 100 HQ Product Installations
• Representing 5000 active store sites
• 2 500 Store Chains
• Throughout the U.S. (E/W N/S) and Canada,
  Puerto Rico, Panama, Bermuda, El Salvador, etc.

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Pricing Past, Present Future
Past Barrier 1 Offer Overload

• Deals
• Allowances
• Bill Backs
• TPRs
• Good Buys
• Better Buys
• Best Buys
• Pool monies
• Timed Buys
• 1000s of them..

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Pricing Past, Present Future
Past Barrier 2 Integration, Systems/People

• 4-5 Item Masters
• Manual Systems (excel is alive and well)
• Throw IT Labor at it
• Undocumented and 20 plus years old
• Discrete Job Functions
• Manual Data Entry
• Manual Processes
• No Score Cards
• Buyers became Merchandisers

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Pricing Past, Present Future
Data Obstacles
Retailer HQ
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Pricing Past, Present Future
Past Barrier 3 Cultural Impacts

• The who moved my cheese syndrome
• We dont do it like that at all (we are unique)
• No Industry Best Practices in place
• Cannot execute in a timely manner
• Strategy and the execution tactics are not
  aligned (or known)
• Resistance to process change can invoke very
  strong opinions!

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Pricing Past, Present Future
The Present Retailer Challenge

• While we have made some progress in retailers
  like yourselves, change is slow coming to our
  industry as a whole
• The acceptance of Best Pricing Practices and
  repeatable successes
• Performance is now becoming measurable
• The end of ORDINARY, image or brand of the store

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Pricing Past, Present Future
The Present Retailer Challenge

• Costs are getting out of control.I.E. Energy
  concerns and how do we deal with them?
• The human capital and knowledge is a problem for
  our industry
• Distinction between Buy Side Systems vs. Sell
  Side Systems is fading
• The net cost coming out of the buying system or
  from the wholesaler is the beginning cost before
  retail
• The trick with Holistic Pricing is to maximize
  your pricing margins without affecting your
  customers price image of your company

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Pricing Past, Present Future
The Present Retailer Challenge
The new consumer wants it all!

• I want a responsible company
• Socially acceptable
• Respectful of mother earth

• As long as I am not to be more
• constrained
• Limited re-cycling effort
• No refills for bottle water??

• Energy costs are scary
• Stock markets are scarier
• I want a great price for
• everything

• Ordinary is so passé
• I will pay slightly more for different
• experience
• Let me be the judge

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Pricing Past, Present Future
The Future Challenge is Here Now!

• The ability to define a Company Strategy can be
  daunting..lots of thought and discussions
• The ability to link your corporate strategy to
  your consumers hearts, wallets, and minds
  (passions) is the key to sustainable business
  success
• A new breed of Loyalty Programs are coming that
  give customers the ability to choose the offers
  that are relevant

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Pricing Past, Present Future
The Future Challenge is Here Now!

• Data Sharing and Portals are appearing amongst
  trading partners taking or exposing information
• The Supply Chain and Pricing/Merchandising
  Departments will merge and have a consistent
  mission toward store level execution
• Costs will become an Ala Carte menu for you to
  pick and choose the ones that are relevant to the
  delivery of goods to your company

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Pricing Past, Present Future
In Conclusion.

• Stay the course and be an evaleglist for change
  within your organization and the industry
• Define your strategy!!!
• Competition is done playing fair, survival of the
  fittest (and most innovative)!

Strategy
Control
Automation
Optimization
Modeling
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THANK YOU