DemandTec Customer Case Study: Giant Carlisle


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DemandTec Customer Case Study: Giant Carlisle

  1. 1. A DemAnDTeC CusTomer suCCess sTory Giant Food Stores Prices the Entire Store with DemandTec Giant Increases Efficiency and Effectiveness in Pricing, Promotion, and Deal ManagementCusTomer overview Giant Food Stores, LLC, a division of Ahold USA, traditionally had a narrow, but consistent Every Day Low Price (EDLP) strategy that it applied across most products. TheChallenge company’s 30 year old, labor intensive pricing and promotion systems could no longerGiant needed more flexibility inits ability to execute pricing and keep pace with the sheer number of pricing decisions in a rapidly changing market,promotion strategies, and it needed and these systems limited the company’s ability to execute more sophisticated pricingto keep pace with a flood of cost and strategies. Company executives recognized that a new solution would boost efficiencycompetitive changes in a fast-moving and help the company stay ahead of its Because they support 30 different price zones covering 147 stores, the pricing teamsolution potentially faced 30 different variations of every decision it made. Adding complexity toDemandTec Lifecycle Price this scenario was the growing amount of competitive data Giant collected and the degreeOptimization™ and DemandTec End- of cost-volatility in the market, which made those decisions even more daunting andto-End Promotion Management™ overwhelming.Key Benefits According to John Lerch, Director of Retail Pricing at Giant, “It wouldn’t be unusual ton Pricing team productivity more execute 40,000 to 100,000 pricing decisions in the course of a week’s time. This was a than doubled daunting task using their legacy manual systems, which required a human decision forn Specific pricing actions are better aligned with corporate pricing every SKU in every price zone.” strategy Giant was interested in more consistently executing its pricing strategy based on an Results of pricing rule changes definitive set of rules. It kept many of the rules on paper, others were only managed in and promotions are accurately people’s heads, and some weren’t documented well enough to help ensure sustainability forecasted before new prices hit the shelves over time. The company also had no means to reliably forecast the impact of rulesn Streamlined deal management changes on its business before prices hit the shelves. process improved efficiency and In addition to the pricing challenges, promotion planning and forecasting were being reduced errorsn Benefits can be rolled into performed manually – a very time-intensive, cumbersome activity for Giant merchants. lower consumer prices – further Vendor deal management added similar burdens, as the paper-intensive and error-prone improving competitiveness processes consumed resources.CompAny snApshoT “I had a very significant backlog of pricing projects,” says Lerch. His team recognized that with its restrictive legacy tools, it had no chance of completing routine pricing executionn Revenue $4.3 Billion work, much less pursuing higher-level goals. “Unless we were to nearly double our staff, we would not have been able to catch up with that.”n Industry Segment Grocery Embarking on a Path of Innovation with DemandTec Solutions for Pricing and Promotion Managementn Geography As Giant surveyed the market for a solution, DemandTec stood out as the company that 147 supermarkets in Pennsylvania, could truly partner with them to meet their current and future needs. Scalability was one Maryland, Virginia, and West Virginia under the Giant Food driver in their decision. DemandTec had proven that its solutions could handle massive Stores, Martin’s Food Markets, and amounts of point-of-sale and competitive data, it could easily handle the large numbers of Food Source banners price changes Giant faced, and it could do so without the need to increase staffing
  2. 2. CusTomer suCCess sTory The company also responded favorably to the solutions’ ease of use, particularly the way it allowed merchants to codify pricing rules using simple, straightforward sentences rather than relying on technicians to interact with the system. The clincher was DemandTec solutions’ forecasting capabilities, which allowed merchants to predict the impact of pricing changes and new promotions and to make changes before prices hit the shelves. Giant chose to implement DemandTec Lifecycle Price Optimization™ for the entire store, including perishables. “DemandTec benefits our company because it makes Streamlined Pricing Processes Bring Greater Agility and Improved Sales Performance us more efficient, so that “Since implementing DemandTec solutions, Giant has seen significantly enhanced we can remain a low cost productivity and efficiency,” Lerch says. The company is now able to respond to all vendor operator. Being a lower cost cost changes and competitive actions on a weekly basis, instead of having to react to operator allows us to be more them as resources became available. That in itself has made Giant more agile. Gains so aggressive at the shelf as far far have been accomplished without increasing staff, effectively boosting productivity to as price and promotions are at least twice what the team had previously managed. DemandTec’s solutions have also concerned, which is better for made it easier to take advantage of more margin enhancement opportunities, and staying in close compliance with Giant’s pricing strategies has resulted in a measurable sales our customers.” benefit. By automating the pricing process, DemandTec solutions have removed the burden of “With DemandTec, we can repetitive pricing minutiae and freed the pricing team to work more strategically. The select the best way to move has also reduced the need to constantly reprioritize projects to ensure that they can be completed. The focus now is on continually tuning Giant’s strategy to maintain structure a vendor deal to profitability while satisfying its customers and maintaining its price image. maximize the benefit in terms of sales, margin, and volume More Profitable Promotions with Greater Efficiency Giant chose to implement the complete DemandTec End-to-End Promotion performance so that the Management™ solution, including the Deal Management software service, to help the vendor is satisfied, the retailer company streamline its trade funds presentation, negotiation, and reconciliation process. is satisfied, and ultimately the Today, 98% of Giant’s vendor deals are negotiated via the Deal Management service customer is satisfied.” on the DemandTec TradePoint Network™. According to Lerch, “With DemandTec, we John Lerch can evaluate a number of different alternatives for a promotion to maximize the benefit Director of Retail Pricing in terms of sales, margin, and volume performance so that the vendor is satisfied, the Giant Food Stores, LLC retailer is satisfied, and ultimately the customer is satisfied. We can ensure much more reliable execution, utilize fewer resources against that promotion, and end up with a better promotion in the first place.” Lerch concludes, “DemandTec benefits our company because it makes us more efficient, so that we can remain a low cost operator. Being a lower cost operator allows us to be more aggressive at the shelf as far as price and promotions are concerned, which is better for our customers.” Learn More About DemandTec For more information on how your company can work with DemandTec, call 888.676.3626 or visit DemandTec, Inc. 1 Circle Star Way, Suite 200 n San Carlos, CA 94070 tel 650.226.4600 n fax 650.556.1190Copyright © 2008, DemandTec, Inc. All rights reserved. Printed in the USA. DemandTec and the DemandTec logo are registered trademarks of DemandTec, Inc. DemandTec www.demandtec.comLifecycle Price Optimization, DemandTec TradePoint Network, DemandTec End-to-End Promotion Management and the DemandTec Platform are trademarks of DemandTec, Inc.All other trademarks mentioned in this document are the property of their respective owners. 09/08