Teradata Price Optimization Software Proves Sales Lift to Bottega Verde; Price Optimization Increases Catalogue Sales, Margin for Bottega Verde

Bottega Verde, Italy's largest natural cosmetics andbeauty products company, has realized a 16 percent increase incatalogue orders and a nearly 25 percent increase in total netcontribution since it began use of Price Optimization(TM) softwarefrom Teradata(R), a division of NCR Corporation (NYSE:NCR). Theresults are significant for retailers interested in increasing profitswithout losing customers and for those facing broad market changesthat affect pricing. Bottega Verde has more than 250 stores throughoutItaly, an established catalogue offering and a growing eBusinessdivision. Bottega Verde is currently using Price Optimization toadjust product prices and inventory levels in its stores.

Prices Dropped, Gross Sales and Margin Rose for Catalogue

The Teradata Price Optimization software significantly facilitatespricing by analyzing detailed basket level data over a period of time.By combining information from product assortment, promotional andother available data, it provides a statistical basis for pricingdecisions and makes it possible to track the influence of pricing onconsumer behavior. The application identifies the range for priceadjustments for each product based on price elasticity, substitutionand cross-selling effects, as well as margin and sales volume factors.

The September 2005 Teradata Price Optimization pilot at BottegaVerde analyzed the impact of pricing on the items offered in thecatalogue. In many cases, the optimization software lowered itemprice, reducing per-unit gross margin. For nearly 10 percent of theproducts, the software actually raised the product price. As a result,gross sales increased by nearly 15 percent and total gross marginincreased by more than 11 percent. The sales comparison was madeagainst catalogue sales where prices were set by product managers.

Price Optimization a Critical Advantage in Broad Market Change

The detailed level of analysis, the extensive price changes thatwere made and the significant results to the bottom line areparticularly important for retailers in highly competitive situationsor for those facing vast market changes. In Germany, where thevalue-added tax (VAT) is expected to increase next year, TeradataPrice Optimization software will help companies to realign prices forlarge parts of their product lines. The raise in German VAT from 16percent to 19 percent scheduled for the beginning of 2007 is a concernfor retailers. "Retailers are experiencing severe competition, andconsumer spending in Germany is weak. Consumers are likely to penalizeretailers who pass on the tax hike directly," said MikaelBisgaard-Bohr, director of Retail Center of Expertise for TeradataEurope, Middle East, and Africa.

"To guard against that, retailers are working carefully to adjustprices in ways that maintain their profit margins without negativelyaffecting the sales volume or creating customer resentment. This is socritical to their success that they are not willing to rely oninstinct."

The next challenge: Optimize Store Prices and Inventory

The catalogue is just the first sales channel to realize priceoptimization at Bottega Verde. "Price Optimization in Bottega Verde isstrictly linked to another important project assigned to Teradata:inventory management, as well as pricing of all the offers made withina selling period, both in shops and through our mail-order channel,"said Bottega Verde CEO Paolo Lavino. "It will be critical that thebusiness information is correct and coherent across the BV Shops, mailorder, Internet and telemarketing channels, and for all business usersfrom product managers to the management goods office."

The inventory management project will also propose appropriatestock levels to product managers for the selling period, the channel,and across other variables such as geographical area, shop locationand size. When this project is completed, the results can be used tofurther improve results from Teradata Price Optimization.

"Automating the process of setting prices and inventory levelswill have positive repercussions on work quality and quantity becausewe will realize significant time savings. The estimate is we will savea minimum of 30 days of work per month. Those valuable resources willbe freed up to be involved in other important tasks," Lavino said.

"Retailers always want to obtain additional profit, but marketforces always make it difficult. Teradata Price Optimization providesthe winning edge, giving smart retailers the detailed information theyneed to gain competitive advantage, based on their specificoperations, customer base, product lines and locations," Bisgaard-Bohrsaid.

About Bottega Verde

Bottega Verde (www.bottegaverde.com) is a renowned Italianprovider of cosmetics, beauty products and accessories. The companyhas dedicated itself to products that are entirely natural anddifferentiates itself through providing exceptional quality andservice to its customers. With more than 250 stores throughout Italy,an established catalogue offering and a growing eBusiness division,Bottega Verde is a distinguished leader in its space.

About Teradata Division

Teradata (www.teradata.com), a division of NCR Corporation(NYSE:NCR), is the global technology leader in enterprise datawarehousing, analytic applications and data warehousing services.Organizations around the world rely on the power of Teradata'saward-winning solutions to get a single, integrated view of theirbusiness to enhance decision-making, customer relationships andprofitability.

About NCR Corporation

NCR Corporation (NYSE:NCR) is a leading global technology companyhelping businesses build stronger relationships with their customers.NCR's Teradata(R) data warehouses, ATMs, retail systems, self-servicesolutions and IT services provide Relationship Technology(TM) thatmaximizes the value of customer interactions and helps organizationscreate a stronger competitive position. Based in Dayton, Ohio, NCR(www.ncr.com) employs approximately 28,200 people worldwide.

NCR and Teradata are trademarks or registered trademarks of NCRCorporation in the United States and other countries.