Convergence Of Marketing, Merchandising Enabled By Union Of DemandTec/Connect3

The much talked about marriage of marketing and merchandising functions in retail moved closer to reality this week with the announcement that DemandTec had agreed in principle to acquire Connect3 Systems.

The proposed union would bring together DemandTec’s suite of pricing and promotion SaaS solutions with Connect3’s advertising, merchandising, and promotions software, promising the first end-to-end promotion management solution for retailers and consumer products companies.

Dan Fishback, DemandTec’s President and CEO pointed out that the merger will quickly advance the company’s goal of using the flexibility of cloud computing to provide shopper insights to both ends of the value chain. “This acquisition is a powerful step towards fulfilling our vision of retailer and manufacturer collaboration in the cloud,” said Fishback. He added that the company’s solution for managing promotions “enables an end-to-end process to collaboratively plan, optimize, and execute more targeted promotions across multiple channels and media such as print, Internet, mobile devices, and more.”

Connect3 has helped retailers such as Best Buy, Home Depot, Office Depot and Giant Eagle to improve the efficiency and effectiveness of their cross-channel and cross-media promotions.  The Connect3 solutions support the workflow of both the merchandising and advertising departments and include key capabilities such as cross-media budgeting, workflow management, versioning, and other advertising execution functionality.

As part of the proposed merger, the Connect3 modules will be incorporated into DemandTec End-to-End Promotion Management, DemandTec’s SaaS solution suite for managing the complex promotion process, including internal and external collaboration, planning, optimization, execution, and measurement.


Dale Byrne, Connect3’s President and CEO, added that the merger will enable the collaboration around the customer that both retailers and consumer products companies have been discussing for many years. “As merchandising and marketing further converge in retail and increasingly involve the consumer products manufacturers, it makes perfect sense for Connect3’s footprint to be added to a truly visionary solution for the extended industry,” Byrne said.

The transaction has been approved by DemandTec’s board of directors, and is expected to close during DemandTec’s fiscal quarter ending February 28, 2009, subject to customary closing conditions.

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