About the Customer
Ermes Department Stores Plc, a member of CTC Group, is the largest retailer in Cyprus with more than 90 retail stores.
Scope and Challenges
Product pricing markdowns are a common practice for retailers today. The challenge is identifying the ideal price point and timing of these discounts to deliver cost-conscious customers great deals while avoiding the need to sell items at a loss that erodes potential profits.
This was precisely the issue for Ermes Group, which decided to move from a manual approach.
Outcome and Implications
In 2017 the company realised the perfect option for them is IBM’s cloud-based Watson Commerce.
Since working with IBM, Ermes is now able to automatically determine which specific products in each store should be marked down due to stagnant sales, what the new price should be and when the reduction should take place. Previously, teams had to manually go line by line for every product to determine how it was performing and if they should put it on sale. Since going live in 4Q 2016 with IBM, Ermes has significantly streamlined its retail pricing strategy while increasing profits.
“Effective customer engagement doesn’t just happen. It comes from a commitment to several factors, from personalized offers and flawless services to delivering value. Retailers must deliver value, but it cannot come at the expense of the bottom line,” said Harriet Green, General Manager, IBM Watson Customer Engagement.
“Due to shifts in styles and consumer demands, product markdowns are a reality that all retailers must face. The key is knowing both when to act and what price point will allow the business to still profit on each item left in stock,” said Sophocles Sophocleous, Purchasing Manager of Ermes Department Stores Plc.
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