Payless ShoeSource Inc has extended its relationship with i2 Technologies Inc by selecting two software modules to optimise markdowns of seasonal merchandise in its nearly 5,000 stores.

Payless is one of North America's largest family footwear retailers and maintains an average of 800 different footwear styles and colours. But because most of its shoes are seasonal, the company needed a solution designed to quickly plan for and react to changing demand, allowing it to maximise revenue and achieve margin and clearance objectives.

To meet this need, Payless purchased i2 Demand Planner from the company's Supply Chain Management suite, and i2 Markdown Optimizer from i2 - Customer Relationship Management solutions.

i2 Demand Planner is designed to allow Payless to predict, manage and optimise future demand. This solution creates forecasts based on rate of sale and on-hand inventory. The information is then integrated into i2 Markdown Optimizer, which has been developed to examine product sales and inventory positions and determine the optimal markdown schedules for maximising revenues and minimising inventory write-offs. i2 Markdown Optimizer incorporates price elasticity of demand into the optimisation and supports what-if analysis to evaluate alternative markdown strategies.

Said Darrel Pavelka, senior vice president, merchandise planning and distribution, Payless ShoeSource: "Our current i2 solution, Merchandise Planning, is a critical part of our overall strategy for improving assortments in our stores. We anticipate that by expanding to Demand Planner and Markdown Optimizer, we will be able to derive significant value from the integration of i2's merchandising optimisation tools."

Payless believes that with these solutions in place, the company can impact margins and better meet customer demand for its products. It anticipates that the global implementation will be completed in the second quarter of 2002.