INFORMATION DRIVEN

Maximize Sales and Margins with Price Optimization

Oracle Retail Lifecycle Pricing Solutions
Leverage the Power In the retail industry, the “moment of truth” comes
of a Holistic, Science- down to the right product, in the right place, at the
Based Pricing Strategy right price. For pricing in particular, dramatic indus-
try changes have led to a complex environment that
demands a more-dynamic and precise strategy.

Price is typically the fastest and strongest lever to affect a quick sales turnaround,
and to price your products effectively, you must make rapid decisions based on
customer demand at the store level. However, timely, effective pricing decisions
can be difficult with thousands of items in hundreds of stores located around
the world, each with varying consumer preferences. Oracle Retail’s solutions are
based on best practices and use retail science and analytics to help you make
optimized, insight-driven, item- and store-level decisions at every point in the retail
process, including pricing for all stages of the product lifecycle. Oracle solutions
leverage one enterprisewide forecast that factors in all key demand drivers and
communicates them to systems across your organization. This integration provides
you with a thorough understanding of forecasted demand, so you can meet your
customers’ needs and improve profitability in the face of growth.

Oracle Retail lifecycle pricing solutions help you efficiently execute all types of
pricing: everyday, promotional, and markdown. These solutions offer the benefits
of forecasting science and robust optimization specifically designed to meet the
requirements of each key retail vertical, such as short-life fashion merchandise or
long-life hardlines and grocery merchandise. And the embedded price optimization
analytics deliver better overall planning, so you can balance your prices with
downstream supply chain activities through to execution in-store, helping to
avoid costly overstocks and understocks. Oracle Retail’s comprehensive, end-
to-end lifecycle pricing solutions deliver maximum value at a low total cost of
ownership—so your customers can count on you to have the merchandise they
want, on hand, and at the right price.

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 Fact: Retailers running Oracle are
48 percent more profitable than
their peers.
(Source: Oracle Performance Advantage
Research Report, April 2008, Mainstay Partners.)
Why Use Lifecycle Pricing?
Recent trends have had major
implications for pricing strategies,
increasing the need for more-
sophisticated pricing systems.
• Geographic and demographic
diversity has created the need for
a variety of flexible price-elasticity
curves for individual products and
localized pricing strategies.
• Falling trade barriers let you source
products globally to reduce costs,
but this can lengthen lead times
significantly. The effect of pricing
strategies on demand must be
analyzed to ensure adequate stock.
• In the current economic climate,
value-format retailers dominate
the industry. With efficient supply
chains and huge buying power, they
have compressed prices across
categories. To protect margins,
you must actively manage prices.
• Many customers shop largely on
price and convenience, so you
must deploy pricing strategies that
maximize margins for differentiated
products, while employing loss-
leader and parity pricing strategies
where and when beneficial.
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Enhance Your Pricing Processes to Boost Profits
Oracle Retail offers pricing solutions that enable more-profitable pricing decisions through-
out an item’s lifecycle: from maximizing the profitability of everyday pricing, to driving the
highest-value promotions, to ensuring maximum profit while clearing end-of-life inventory.
These solutions help you quantify item-level demand—taking into account factors such as
seasonality and elasticity, cannibalization and halo effects, and competitor pricing activities.
You can then use this demand information to analyze possible pricing scenarios and select
the best one based on overall goals and business constraints. These solutions also deliver
robust “what-if” analysis capabilities and forecasting analytics, allowing you to evaluate the
impact and trade-offs of decisions prior to price approval and execution in stores.
True lifecycle pricing involves more than simply enabling appropriate pricing throughout
an item’s lifecycle. Unfortunately, most organizations are encumbered by processes and
systems for pricing and promotions that are disjointed and fragmented. This challenge prevents
critical insights from being shared, resulting in item-level price decisions that are misaligned
with overall category goals, promotions that cause out-of-stocks because demand is not
understood throughout the supply chain, and prices that are not actionable due to lack
of integration with your execution system.
Oracle Retail’s solution to these challenges uses a common demand forecast to connect
pricing to other critical areas of the business, such as assortment planning, supply
chain management, and in-store execution. Oracle Retail delivers the industry’s most
comprehensive suite of pricing, planning, supply chain, and in-store execution solutions.
These best-of-breed applications provide retail-specific decision support to drive more-
profitable everyday merchandising decisions. Oracle’s unique approach lets you achieve
maximum value by embedding price optimization into overall category management and
balancing pricing throughout downstream supply chain activities to execution in-store.
With Oracle Retail solutions, you can develop efficient, demand-driven operations that
deliver the financial rewards of industry leadership.
Lifecycle Pricing Designed for Your Merchandise Mix
Because the goals and processes of pricing can vary depending on the type of merchandise
mix, Oracle Retail offers lifecycle pricing solutions designed to address the unique require-
ments of each key retail vertical. Moreover, Oracle’s solutions offer a modular approach,
driving low total cost of ownership and ensuring alignment with investment priorities.
If you are a retailer with seasonal or short-life merchandise, such as fashion and apparel,
you typically have a goal of clearing inventory while maximizing profitability.
“Oracle Retail Price Optimization will provide insight into consumer demand for
styles and trends, which helps us create pricing that shoppers consider a value.
Our customers expect fresh, trend-right product in our stores, and the system
will help us deliver on that promise.”

John Dembinski, Vice President Merchandise Planning and Allocation, Famous Footwear

Oracle Retail delivers robust science and analytics in an end-to-end lifecycle pricing Align Pricing Decisions with
approach, so you can quickly react to changes in demand for items with little or no item Category Management Goals
history and short, rapid demand peaks—increasing inventory turns and driving gross When pricing processes are not
margin dollar growth. This approach includes the following solutions: integrated with category planning
processes, you cannot translate
• Item and assortment planning: Defines assortment strategies and buy quantities by
your overall strategies into item-
store/cluster to create item lifecycle plans and then manages the items in-season
level prices that drive toward your
• Promotion planning and optimization: Translates strategies from category management category goals. Oracle Retail’s
or item/assortment planning into identification of the highest-value promotions with the approach to lifecycle pricing is
best advertising space allocation, while understanding item and market-basket impact based on solutions that can be
within a robust “what-if” framework integrated to enable an insight-
driven enterprise, so you can
• Markdown optimization: Translates strategies from item/assortment planning into
optimized markdown pricing that will clear inventory while maximizing profitability • Communicate price across all
merchandise-planning processes
• Retail price management: Checks business rules and reconciles conflicts before sending and supply chain activities
prices to stores for execution • Understand demand and its effect
on shelf space, SKUs, and promo-
• Retail demand forecasting: Leverages item demand changes to drive one common
tional decisions and pricing
forecast across the entire enterprise
• Reduce over- and under-stocking by
Retailers with long-life, replenished merchandise such as hardlines and grocery retailers understanding how price changes
typically use a pricing-strategy process based on driving maximum performance throughout demand for an item and halo items,
an item’s lifecycle. Oracle Retail delivers an end-to-end lifecycle pricing solution that focuses and then communicating these
on maximizing overall financial goals throughout the lifecycle, including applications in demand changes throughout all
these areas: supply chain activities
• Gain maximum value from lifecycle
• Oracle Retail Category Management: Defines category and item strategies and goals,
pricing solution investments by
rationalizes assortment, and optimizes space to achieve overall financial targets
integrating price optimization with
• Oracle Retail Regular Price Optimization: Translates strategies from category management in-store execution for pricing deci-
into the optimal price at every stage of the product lifecycle, factoring in halo and cannibaliza- sions that are actionable
tion effects, cross-elasticity, margin goals, competition, and case-specific business rules

• Oracle Retail Promotion Planning and Optimization: Translates strategies from

category management or item/assortment planning into identification of the highest-value
promotions with the best advertising space allocation while understanding item and market-
basket impact within a robust “what-if” framework

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 “We challenged Oracle Retail to provide us with solutions and technology across
our entire retail footprint within an integrated framework. In the end, there was
no one else in the market close to delivering the broad range of solutions that
Oracle could for our business. They made it an easy decision for us to partner
with them.”

Kristen Blum, Chief Information Officer, Abercrombie & Fitch

Oracle Is No. 1 in Retail • Oracle Retail Markdown Optimization: Translates strategies from category management
With the help of Oracle Retail you into optimized markdown pricing to clear end-of-life inventory while maximizing profitability
can keep pace with your customers • Oracle Retail Price Management: Checks business rules and reconciles conflicts before
and transform the economics of
sending prices to stores for execution
your business.
• Oracle Retail Demand Forecasting: Leverages item demand changes to drive one common
• Only Oracle provides end-to-end
forecast across the entire enterprise
technology solutions—database,
middleware, and applications,
all based on open standards—to
transform your retail business. The Oracle Retail Advantage—Insight-Driven Retailing
• Oracle Retail is the result of
Oracle’s strategic acquisition of
best-of-breed applications, as well
Oracle Retail’s lifecycle pricing solutions are “smart,” which means they enable better
as the realization of its long-term
pricing and promotion decisions because they are based on retail science in the critical areas
vision for the retail sector. These
of forecasting and optimization. By incorporating retail science into your decision-making
applications provide retailers in
processes, you can validate more-subjective business instincts with an impartial, informed
key vertical segments—including
foundation for the myriad of pricing decisions you face. Moreover, retail science makes it
fashion, grocery, and hardlines—
possible for you to automate the more-mundane, quantitative aspects of decision-making.
with more insight, increased
Finally, pricing processes supported by fact-based, scientific analysis increase your employees’
integration, and greater value to
productivity and allow pricing at lower organizational levels than was previously possible.
drive customer relationships.
The results are smarter decisions that focus on customer demand, which ultimately improves
• Oracle Retail’s advanced analytic
sales and gross margin through optimal lifecycle pricing.
capabilities transform your ability
to make decisions, so you’ll carry Oracle Retail customers have gained significant benefits by deploying lifecycle pricing
the right items all the time. solutions, including a 5 to 15 percent improvement in gross margin dollars, a 10 to 15
• Only Oracle offers analytic capa- percent improvement in sales dollars, and a 10 to 15 percent increase in inventory turnover.
bilities that are fully integrated Results such as these have helped Oracle become the No. 1 provider of innovative and
between merchandising and comprehensive software solutions for retailers—delivering insight into daily business
financial systems. decisions so you can serve your customers better and gain more-profitable results.
• Oracle Retail applications begin and
end with value—so you can start CONTACT US
with an immediate return on invest-
ment and continue with improve- To learn more, please visit oracle.com/industries/retail or call +1.800.ORACLE1 to speak
ments that sharpen your business to an Oracle representative.
strategies and execution capabilities. Outside North America, visit oracle.com/corporate/contact to find the phone number for your local Oracle office.

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