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KB Toys buys into retail intel program

IN a cut-throat toy market, retailers need to do everything they can to wring out every inefficiency from their operations and plan promos and stunts that are all but guaranteed to increase sales. And one company that's stepping up to help them do this is retail intelligence service QuantiSense. The Washington, DC-based outfit specializes in helping clients including FAO Schwarz and KB Toys devise merchandising plans based on seasonal trends, events and regional customer demand.
May 1, 2007

IN a cut-throat toy market, retailers need to do everything they can to wring out every inefficiency from their operations and plan promos and stunts that are all but guaranteed to increase sales. And one company that’s stepping up to help them do this is retail intelligence service QuantiSense. The Washington, DC-based outfit specializes in helping clients including FAO Schwarz and KB Toys devise merchandising plans based on seasonal trends, events and regional customer demand.

A relatively new QuantiSense customer, KB Toys is just embarking on a process that will phase in the entire service over the next year. Starting this month, the first 100-day stage of implementation involves installing the software and getting the system up and running across all of KB’s departments.

‘Our software pulls the data from their different operational systems, transforms it, and puts it into a centralized database that we’ve licensed to them,’ says Jeff Giberstein, QuantiSense’s VP of marketing. The software is able to churn out a wide variety of data summaries tailored to suit the info needs of many levels of staff, from chief executive down to store manager. It’s built to highlight things like overstocks, stockouts and product upswings and downswings, and can inform decisions concerning product allocation, assortment planning, pricing and supply chain management.

Subsequent phases will enable the company to analyze sales patterns and rate the effectiveness and profitability of running various kinds of promotions at different times. Tim Armstrong, KB’s director of analytical business solutions, says that once the system is fully implemented, the chain will be able to determine things like whether a 20% off sale over the weekend drove sales, influenced customer behavior and moved the desired amount of inventory.

Giberstein says a low-end installation runs at just under US$500,000. That initial cost includes the QuantiSense software, as well as some third-party software and hardware needed to support the system. A 20% annual fee then goes towards system maintenance and updates.

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