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SAP IS Retail Pricing and Promotions Overview | |||
Price
Management and Execution
As
retailers operate in an increasingly competitive and complex environment,
they cannot rely on outdated methods and technology to be successful. Coming up with the right price is
not easy, yet it is a critical lever of profit and conveys a particular
image to consumers.
Furthermore, retailers need to be able to manage pricing throughout
the entire product lifecycle.
SAP offers retailers the ability to get the right price at the
right time at the right stores using a rules-based retail pricing solution
that helps retailers accomplish a variety of objectives,
including: o
Improve
gross margins o
Monitor,
react and succeed in a highly competitive market o
Communicate
a consistent, attractive price image o
Align
and manage multiple formats and regions o
Achieve
better pricing controls o
Better
position private label brands o
Measure
sales and profitability performance o
These
objectives can be met using SAP’s retail pricing tools to carry out a
variety of strategies and tactics, such as: o
Formats
and Price Zones o
Hi-Lo
Pricing o
Every
Day Low Pricing (EDLP) o
Category
Roles and Pricing o
Relational
Pricing o
Competitive
Pricing o
Margin
Targets o
Rounding
Rules o
SAP
also provides critical controls to the process: authorization profiles,
workflow, and audit trails. Pricing
Features: o
SKU/Store-based
pricing o
Company,
regional, zone pricing o
Validity
dates o
Flexible
selection criteria o
“What-if”
pricing simulation tool o
Rules-based
pricing o
Cost-plus o
Competitive
response strategies o
Markup/-down
% or value o
Valid
periods o
Pricing
spreads o
Product
family controls o
Last
digit rounding rules o
Unit
pricing o
Pre-priced
(MSRP) o
Custom
formulas, rules, and tolerances o
Pricing
control o
Recommended
pricing based on cost change o
Landed
cost, moving average cost, DC transfer price, or scaled-based cost used as
cost-plus basis o
Pricing/margin
tolerances o
Workflow
approvals o
Mass
maintenance o
Audit
trail (pricing documents) o
Price
change cancellations o
Integrated
with promotional planning and markdown planning o
Integrated
with POS – prices sent to relevant stores at the right
time SAP
Promotion Management Overview As
retailers face increasing competition and find that customers have become
more price-sensitive and are trained to wait for promotional deals, many
retailers have resorted to spending more money on promotions and have
increased the frequency of them. In certain segments, like grocery and
drug, there is usually a promotion running every week. Although some retailers pursue an
everyday low cost pricing strategy and don’t promote very much, some
retailers opt for a Hi-Lo pricing strategy, where promotions are a key
component of their business model.
SAP supports a variety of retail business models and provides
retailers with tools to plan, execute, and analyze
promotions. Promotions
Features: o
Plan
promotional theme, items, quantities, and prices (special price, % off, $
off, BOGO and other deal types) o
End
digit rounding rules o
Flexible
selection criteria o
Assign
stores or store groups o
Manage
deals, discounts, incentives, coupons o
Apply
vendor deals o
Control
what items and phases (buying, delivery, and selling periods) of promo
plan are active and when (linear, overlapping, ...) o
Visibility
to costs and key figures o
Store
notifications o
Optional
versus mandatory store participation o
Integration
to procurement o
Allocation
strategies o
Flexible
‘what-if’ simulations to achieve desired goals and
margins o
Mass
maintenance – many items, multiple levels, concurrent users can work the
same promotion o
Reference
historical promotions during planning process o
Interface
to 3d party content management tools o
Analytics
– create tailored reports to track KPIs, measure lift, look at planned vs.
actual performance, and guide future promotional
decisions o
Discounts o
Bonus
buy deals for o
Deal
types: o
Special
price o
%
discount o
$
discount o
Free
goods o
Deals
based on… o
Certain
items purchased o
Certain
quantities purchased o
Scales o
Customer
card, coupon presented o
Min/max
value of transaction o
Defined
prerequisites o
Deals
applied to… o
Single
item o
Item
group(s) o
All
defined prerequisites o
Entire
transaction o
Audit
trail – who changed what and when o
Integration
to regular retail price management o
Automatic
download of promotion prices to POS systems on a specified validity date
(and on demand) and automatic resetting of standard prices when the
promotion is over SAP
Markdown Management Overview For
markdown planning, SAP helps retailers balance efforts to ensure that as
little stock as possible remains at the end of a season while minimizing
the loss of profit due to price reductions. After planning your markdown
strategy in SAP Retail (either pre-season or in-season), you can
execute it and monitor the planned vs. actual sell-through results to see
how well the strategy is working. You control the markdown plan, so you
can make adjustments at any time if you see that sales are doing better or
more poorly than expected. Features: o
Plan
markdown items, quantities, and prices o
Assign
stores o
Use
markdown rules and schedules to control which items are active at what
prices during each phase o
Slow-Seller
Management tool automates markdown schedule based on inventory and
timing o
Pre-season
or in-season planning and execution o
Visibility
to costs and key figures o
Flexible
‘what-if’ simulations to achieve desired goals and
margins o
Mass
maintenance – many items, multiple levels, concurrent users can work the
same markdown plan o
Analytics
– create tailored reports to track KPIs, sell-through, and make
adjustments, as needed o
Integration
to regular retail price management |