B&Q to use Web pricing portal to predict profits

The system allows B&Q to test pricing strategies against customer behaviour simulations. It should mean the retailer can forecast more accurately how customers are likely to react to changes in pricing.

From this data, it will then be able understand how this behaviour affects each point of the merchandising lifecycle, and enable it to predict how merchandising will influence profit margins.

The service runs over DemandTec software, and is hosted by IBM.

‘Access to the highest quality technology on demand helps us compete in an increasingly dynamic and competitive marketplace,’ said B&Q head of pricing Howard Langer. ‘The service we will receive will allow us to more effectively carry out our strategy of delivering low prices to customers.’

The cost of the service is calculated using the number of stores and the range of SKUs in each simulation, together with the total amount of data being processed.

The announcement is the latest of a growing number of retailers getting involved in price optimisation technologies, including Safeway and Somerfield.

The service is the first offering from IBM’s On Demand services strategy, which centres on making hosted services available over the Internet all over the world.

An IBM spokesman said: ‘B&Q is at the forefront of this service from IBM. Today’s announcement reinforces our commitment to providing companies with services that differentiate their business, maximise revenue and improve market share.’