Retail Merchandizing Strategies

Retail category managers often manage thousands of products with varying levels of sales
and profit margins. Many experienced retailers have developed a knowledge of the intrinsic
dynamics of the category that enables them to merchandize the products to drive additional
values & profitably.
CustoLogix recognizes the knowledge possessed by the experienced retail managers, the
knowledge in many cases is passed down a generation of retailers who find their unique
merchandizing strategies through a process of trial and error.

Our team of consultants has transformed this knowledge base into useful science and
analytics that every retailer can benefit from.
Some examples of our services based on this philosophy include:

- Shelf space optimization

- Assortment optimization
- Store layout optimization
- Strategies to promote private label sales

Product Pricing & Promotion

One of the most important levers a retailer has to be able to increase in sales and profitability
is the price and promotion levers. An experienced retailer will know exactly which product
reacts to a price change or promotions and which products will not react.
Using sophisticated mathematical techniques CustoLogix is able to accurately determine this
reaction to price changes and promotions on the product. The highly trained team of retail
mathematicians use sophisticated computer programming techniques to identify the unique
lift and price elasticity associated with each product.

Using mathematics CustoLogix is able to:

- Identify the price elasticity of each product
- Quantify the lift generated by various promotions
- Determine the optimal price that generates maximum revenue or profit
- Optimize the promotion plan to maximize the units, revenue or profit

Competitive Strategies
A typical consumer has several stores to choose from to do his shopping. This decision is
influenced by various factors that can be controlled by the retailer to draw the consumer to
his particular store. The most important amongst these factors are location, assortment, price
and convenience.

By understanding the unique market position of each retail client CustoLogix is able to
provide strategic recommendations in the following areas:

- Store location selection algorithms

- Identification of key image items that influence price perception
- Monitor and maintain competitive position on image items
- React ahead of the competition on market trends
Brand and Category Management
Retail managers often walk the tight rope trying to balance the various brands and products
within their categories. While the vendors constantly strive to increase their brand sales, the
retail manager is looking to increase the overall sales and profitability.

The barrage of new product introduction, limited shelf space and limited promotion
opportunities add to the complexities in the everyday tasks of the retailer.
A unique brand/category management tool when grouped with powerful analytics and real
time information of any desired aggregation level gives the retailer the visibility he needs to
be able to make the right decisions.

Some examples of brand/category management solutions provided by CustoLogix include:

- Periodic reports that monitor and report sales by units, revenue and profits
- Identify key trends, seasonal increase or decrease in sales
- Monitor vendor/ brand sales and profitability
- Customized brand level and category level reports

Product Lifecycle Management

Different products have widely varying product lifecycles. From a can of beans that
maintains a certain sales rate for a number of years to the sale of videogames that falls
exponentially from its day of introduction, the savvy retailer has to stay on top of the
lifecycle of each product to manage its sales to achieve highest possible sales and
profitability through pricing, promotion and markdown management.

CustoLogix proprietary mathematical techniques allow new products to borrow coefficients

and sales behavioral patterns to older and similar products.
When coupled with other aspects of the CustoLogix RapidAnalytix platforms the retailers are
able to:

- Set the right price for new products

- Forecast accurately in the absence of historical data
- Manage a product through introduction, growth, maturity and decline
- Avoid stock out and lost sales opportunities