Four leading retail technology firms - KhiMetrics Inc, Mercari Technologies Inc, Net Perceptions Inc, and Spotlight Solutions Inc - today announced that they have formed the Retail Optimization Council, an industry organisation designed to help retailers and vendors jointly understand and implement optimisation solutions. 
 
The Council's mission is to increase growth and profitability for the retail industry by making the demand chain more efficient. The group defines the demand chain as a process that begins with customer delivery and "pulls" a demand forecast back through to the manufacturer - or to where the supply chain leaves off.

Demand chain optimisation utilises the demand forecast, based on current store-SKU sales data, to enhance the primary customer-facing merchandising activities of product selection, price (including regular and markdown), promotion and placement at the shelf.  

"For years, the retail industry has focused on the supply chain, without addressing consumer behaviour and the demand chain," said Brent Lippman, president of KhiMetrics and chairman of the Council.  "By optimising the demand chain, retailers can expect to increase sales and profits as well as build competitive advantage through a customer-centred blend of product selection, pricing, merchandising and promotional decisions."

According to Lippman, the Council is dedicated to elevating the role played by optimisation technologies in merchandise planning and minimising the reliance on intuition, anecdotal and historical insights. 

"Analytics are the hottest story in retail technology today, and retail optimisation is a key part of it," said Cathy Hotka, NRF vice president of information technology.

The Retail Optimization Council will serve both retailers and retail technology companies, mainly through the development of open integration standards, educational programs and research pertinent to the optimisation of the demand chain.