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Consumers across the UK will have noted a surprisingly high number of retailers slashing prices pre-Christmas last year, well ahead of the traditional January sales. In many cases the price changes were well conceived and profit enhancing. In many others, they were poorly conceived and profit eroding. 

So, the question for retailers remains; when is it right to lower prices and how can stores avoid simply giving money away?  

Itim wants to help retailers boost profit intelligence in their operations, which is why it has made a strategic investment in Profimetrics, a European-based company specialising in what it calls Integrated Profit Optimisation™, IPO™.

IPO™, is an integrated full product life-cycle, price optimisation software solution designed to help retailers boost profits by suggesting demand-shaping strategies, by recommending appropriate price changes, promotions or markdowns based on competitive trends sales volume, stock levels and margins, as well as other factors. 

In today's competitive market, time constraints often lead retailers to manage decision-making by managing averages. IPO helps retailers achieve new levels of "profit precision" by applying intelligence to the vast number of numbers that retailers must manage daily, by helping them avoid the margin-punishing compromise that averaging creates. It removes the guesswork from merchandise margin management to ensure that sales and profit objectives are consistently achieved.

For example, in a fashion retailer, IPO might recommend that the price of a margin-generating shirt could be increased by one price point with no negative impact on sales, generating lb200,000 of additional profit over a six month period. In another case, the software might suggest that a women's jacket need not be in the first phase of a 30% markdown program, saving lb20,000 over a two-week period.

With the "right pricing" of every product, in every store, everyday, the benefits of IPO are tremendous, and, according to an independent study by AMR Research, initial benefits range from "250 to 350% ROI in 12 months and 2 to 7% increases in margin." AMR Research has also concluded that "fewer than 3% of companies effectively manage, communicate and enforce prices", so the opportunities afforded by gaining control in this area are massive. This idea is the driving force behind Profimetrics, and is the reason Itim saw it as an incredible opportunity to add even more value to its retail solutions offering.

Profimetrics came into being only three years ago, but already boasts implementations in Europe, South America and the US, with clients ranging from food to fashion and from specialty stores to hypermarkets. This rapidly emerging global leader was founded by Steven Beck and Chris Cawthorn, the retail visionaries behind a host of other successful retail technologies including Arthur and Planalytics.

Itim Chairman Ali Athar believes that price management and profit optimisation are critical issues to multi-store retailers and that IPO is the best product available in the market. "Our investment in Profimetrics reinforces our message and demonstrates our passion to stay at the forefront of innovation. Our goal is to add value to our customers. We continually look for world class applications to invest in or acquire to add to our portfolio," Athar said.

Chris Cawthorn, Managing Director of Profimetrics, said, "we are pleased that retailers, software vendors, consulting firms and the press are starting to acknowledge our leadership. Itim's investment further illustrates this. What I think of our product is important. What the marketplace thinks is even more important."

In a typical installation, Profimetrics IPO integrates with any ERP (SAP, Oracle, JDA, Aldata or the like) to provide the additional intelligence retailers need to maintain and reinforce their price image and competitiveness to their customers. It has already proven to have made retailers significantly more profitable and customer satisfying, and can be fully implemented in four to six months.

Profimetrics will be run as a separate company. Ali Athar and Itim Finance Director, Ian Hayes, will join the board of Profimetrics.