Markdowns during the fourth quarter impacted gross margins.


DynamicAction, the data analytics solutions firm that serves retail merchandisers, just announced the release of its new “Affinities” capabilities, which the company said is “designed to arm retailers with the ability to increase average order value, revenue and profit.”

The new solution leverages customer data to drive down the overall rate of promotions by specifically looking at product correlations and trends, and then bundling products, shopper profiles and promotions to drive sales. “By connecting these data points, retail merchandisers can more accurately predict sales trends, increase basket size and profitability,” the company noted.

“With Affinities, DynamicAction helps retailers change the mind-set of discount-addicted consumers by creating a path to offer associated and desired products and brands at full price within the same purchase order,” the company added.

The rollout of this feature comes as retailers wrap up a year of heavy promotions. In 2016, DynamicAction said promotions were up by about 84 percent globally compared to 2015. The firm’s current roster of clients includes Brooks Brothers, Cole Haan, Men’s Wearhouse, Nine West and Tesco, among others.

Brian Tomz, chief operating officer at DynamicAction, said in “such a precarious time, retailers need to arm themselves with the proper strategies for success. The thirst for promotions is engrained in the consumer psyche, [but] retailers that are able to thoughtfully place the right items in the right promotions to the right customer segments stand a better chance of generating higher, more profitable order values.”

“This new breed of algorithms and deeply analytical tools uniquely enable retailers to evaluate all of their products multidimensionally and identify areas where they can implement different co-marketing tactics or influence store and website layouts to drive profitability,” Tomz added.

Some of the specific features of the Affinities, includes allowing retailers to “gain access to [artificial intelligence]-driven insights on inventory, profitability and likelihood that products, brands and categories will be purchased in isolation.”

Subsequently, the company said the “inherent bias toward cross-promoting bestsellers, which often will sell through without promotion, is dramatically reduced.” Another aspect of Affinities is that retailers can use data insights to make more “highly refined decisions” in regard to pairing various products for a promotion as well as develop “a product recommendation or an email campaign based on both the revenue and profit impact.”

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