OMAHA, Neb. -- Baker's Supermarkets here plans to enhance its centralized pricing and decision-support system by incorporating frequent-shopper data to ensure that the buying habits of its top customers are taken into account when making decisions about pricing and the types of items to carry. The retailer is hoping to add this and other features, such as support for advertising planning and price markdowns, to the system by the end of the year.
"This will help us make even more informed decisions about pricing and the items we carry," said Mike Petersen, president and chief operating officer for the retailer. "For example, we might do a SKU rationalization on a product and discover that it is not a real money maker. However, armed with the knowledge that this is a product that is popular with our best customers, we would take that into consideration when making a decision as to whether we will continue to carry a particular item," he said.
The upgrades to the system will further enhance the retailer's decision-making capabilities. "We've got all of this data, and to sift through it all is like trying to take a sip of water out of a fire hose. This is a very effective tool. We've got to be able to glean what is most important to our frequent shopper. We've got to recognize and solidify our relationship with our best customers and have that data factored into the mix when making merchandising and pricing decisions," Petersen said.
Aside from the tie-in to frequent-shopper data, the retailer plans to add a feature for tracking promotions. The system will provide users with information on the pricing history of a particular product so they can analyze the effect of past price reductions and plan the appropriate amount of inventory for promoted items.
The centralized pricing system was originally developed internally at Baker's. Members of that development staff have since formed a company, Sirius Retail, also in Omaha, to sell the product to other retailers.
Petersen said the system, which has been in place for about three years, has improved the retailer's business practices and he expects the upcoming enhancements to prove even more beneficial.
"Simply having a centralized pricing system to feed our computer-assisted ordering system has increased our efficiency tremendously," Petersen said. He said that the pricing information is fed into the computer-assisted ordering system, which is from Fleming Cos., Oklahoma City. Baker's is a division of Fleming. "Basically, the point-of-sale and pricing data are fed into the computer-assisted ordering system and that data is used to place product orders. The system learns and adjusts order sizes according to sales, and there is very little need to make changes," he said.
The system has also improved price integrity, he said. "Instead of a clerk at each store entering the pricing information, it is all transmitted from a central location," he said.