Acquisition makes Oracle a retail powerhouse

6 Jul 2005

Oracle has moved to strengthen its grip on the retail market with the proposed acquisition of retail management software firm ProfitLogic for an undisclosed sum. It is Oracle’s fifth key acquisition this year.

ProfitLogic’s software analyses customer demand patterns to help retailers make inventory, pricing and merchandising decisions. Its customers include major multiples such as Toys R Us, JC Penney and Bloomingdales. ProfitLogic’s co-founder and president Scott Friend explained: “Our solutions help many leading retailers enhance their merchandising with greater insight into customer demand, enabling more localised assortment, allocation and pricing decisions.”

The proposed acquisition follows four other takeovers this year, including the US$11.1bn acquisition of PeopleSoft, a US$700m deal for retail software maker Retek as well as two other privately held software companies.

Duncan Angove, general manager of Oracle’s Retek Global Business Unit, said ProfitLogic’s software helps retailers put the right product in the right store for the right customer. “Our acquisition of ProfitLogic will create the most comprehensive software solution for the retail industry. With ProfitLogic’s Retail Profit Optimisation software, Retek’s end-to-end retail products and Oracle’s infrastructure software and enterprise resource planning applications, we will be able to offer an integrated solution for retailers of any size and in any industry.”

The imperative for greater customer insights by multiple store chains was underlined by the vice-president of research at AMR Research Scott Langdoc. “The top priority for retailers in 2005 is to inject insight from all aspects of customer demand into every retail process flow, not just individual applications as is often the case today. These retailers also act on these demand signals with better merchandising and store execution.

“Thoroughly leveraging customer information will enable retailers to move from traditional hunch-based decision-making to fact-based decision making. Benefits include tighter execution, more accurate forecasting and a reduction in out of stocks, resulting in potential 10pc sales and 5pc margin growth for an average tier one retailer,” Langdoc said.

By John Kennedy