Stores, supply chains and sourcing operations have all come under scrutiny, but how many retailers have invested in optimising their merchandising decisions?

Rising input costs and low, if any, sales growth is not an appealing mixture. It’s a scenario that many UK retailers have faced in the past three years, and has led to them making their businesses leaner to survive.

Lowering operating costs, shedding stores in some cases, and optimising their supply chains have all been part of the industry’s survival strategy. Yes relatively few in the UK have got as scientific as they could when it comes to pricing and other merchandising decisions.

With the market now expected to face a period of protracted low growth it surely must be time for retailers to look at how they can maximise sales and margins with technology that not only reports on the outcome of past decisions, but can predict the outcome of future decisions too.

Working with Planet Retail, SAS has produced a white paper on the subject and will also be hosting a webinar on the topic on the 14th June.

Already in the United States price and markdown optimisation systems are in use in many merchandising departments. Retailers in the UK have been slower to take up this technology, yet pricing and promotions are the two weapons that many are using to attack the market share of their competitors.

Just one highlight from the white paper shows the impact such systems can have. Planet Retail explains that in November 2010 US home improvement retailer Lowe’s reported a 0.85 percentage point improvement in gross margins in its third quarter; 30% of this improvement was attributed to its expanded use of price optimisation tools.

As the mark of a good retail business in a low-growth economy turns from sales to profitability, such margin gains are something UK retailers must consider investment in.

To sign up for the webinar please click here and to download the white paper click here