As we continue collaborating on our Point of View (POV) focusing on executive leadership involvement and sponsorship in strategic retail solution implementations, we have identified some nuances relative to specific solution areas. With blurring lines between channels and geographies, Price Optimization solutions are an area of increasing interest to the retail community, and which can bring immense value if properly assimilated and leveraged in a company’s business environment. In this week’s blog, we talk about one area where executive involvement is critical to achieve the best outcomes from a Price Optimization solution implementation: the trade off between margin rates and margin dollars.

You may have experienced the phenomenon of senior leaders, board members and the investment community being too focused on margin rate – sometimes to the exclusion of margin dollars. This seems to make little sense, since shareholder returns are based on margin dollars, not rate. Playing devil’s advocate, however, it is somewhat understandable, since a trend of erosion in margin rates can be a symptom of a sick business that is attempting to buy sales with discounts.

Yet price optimization derives va