Certona Optimizes Revenue and Maximizes Margins for Home Depot

Price and markdown optimization solutions proved their value during the worst of the recent recession—especially for those retailers that didn’t use them. When consumer spending first dried up, some retailers offered deep discounts just to lure customers back into their stores. But these retailers found that what went down didn’t necessarily come back up: customers trained to look for extremely low prices or 75% discounts were turned off when retailers tried to bring prices back to “normal” levels.

The art and science of price optimization has grown increasingly complex, with variables ranging from the retailer’s overall pricing strategy to price relationships between brands and within entire categories. In addition, many retailers still struggle with multi-channel pricing issues, particularly for items that shoppers may research in one channel but purchase in another.

Price and markdown optimization are generally grouped together as part of revenue optimization solutions, and for good reason. In an ideal world, pricing would be so precisely calibrated that there would be no need for markdowns, much less markdown optimization. In the real world, retailers can combine pricing and markdown solutions to maximize full-price sell-through and manage markdowns in an orderly, predictable fashion.

This month’s Vendor Landscape focuses on revenue optimization solutions. RIS lists some of the major pricing and markdown optimization vendors and highlights some recent retailer deployments.

Home Depot’s ‘On-Site’ Personalization
As part of a web site redesign launched earlier this year, Home Depot used software from Certona to introduce personalization on its home page, product pages and at checkout. “We’re seeing significant success there based on an individual’s specific click stream data and history and cookies,” said Hal Lawton, president of online at Home Depot. In addition, Certona was recently recognized by the Patricia Seybold Group as a leader in recommendations and personalization for online and multi-channel retailers.

Source: RIS News