Chase-Pitkin Home & Garden To Outline Benefits Of Predictive Analytics At SPSS Directions 2004 User Conference.

LAS VEGAS -- Leading regional home improvement retailer will discuss how SPSS' business intelligence tools have cut shrink on some products by 50 percent, delivered 100 percent ROI in first year

At the annual SPSS Directions 2004 user conference, leading regional home improvement retailer Chase-Pitkin Home Centers will highlight how the company used SPSS predictive analytics technology to significantly reduce inventory shrink-- by as much as 50 percent on some products. Chase-Pitkin, a division of Wegmans Food Markets, will present to the first annual gathering of SPSS (NASDAQ: SPSS) customers and explain how its implementation of SPSS predictive analytics delivered a full 100 percent ROI in its first year of implementation.

Chase-Pitkin will outline how its deployment of SPSS business intelligence tools has reduced shrink on some high-value items by more than 50 percent, and overall chain-wide shrink by more than one-tenth of one percent. The savings from shrink reduction more than paid for the Rochester, New York-based company's investment in software from SPSS in less than one year.

Inventory shrinkage, or "shrink"--a combination of employee theft, shoplifting, vendor fraud and administrative error--cost American retailers more than $31 billion in 2003 according to a National Retail Security Survey. The ongoing commitment to reduce shrink is more challenging than ever before. Companies must implement systems to efficiently identify the top items affected by shrink, uncover sources of shrink and measure any increase or decrease in shrinkage.

At the session, Chase-Pitkin will share how it used predictive analytics to identify and lower shrink by gaining a more comprehensive understanding of its inventory--at an item-by-item level--to determine which items were most susceptible to shrink, and to implement new tactics to safeguard these products.

According to presenter Christopher Dorsey, controller and CIO for Chase Pitkin, "Shrink is incredibly complicated, and Chase-Pitkin decided to attack it by truly understanding shrink at the item level. Before we implemented the ShowCase Suite from SPSS, we could only drill down to the department level. Now we can slice-and-dice data on the thousands of products we sell in order to determine those items that are our 'shrink leaders.'"

By leveraging SPSS technology, Chase-Pitkin was able to successfully identify the top 16 items--in this case, power tools--that represented 50 percent of shrink.

By focusing on these 16 items, including monitoring them by store cameras, Chase-Pitkin managers were able to determine that shoplifters smuggled these particular items. The retailer has since developed policies to prevent theft, such as conducting weekly inventory and moving the location of the items within stores. As a result, shrink on these items has been reduced by more than 50 percent, and overall shrink has been reduced by one-tenth percent. Similar results have been achieved in the garden department after identifying the 12 items that generated 33 percent of shrink.

Based upon its success in analyzing and detecting shrink in the power tools department, Chase-Pitkin is anticipating recouping a half to a full percentage point of shrink within the next couple of years.

A full case study on Chase-Pitkin's use of SPSS can be found online at http://www.spss.com/success/template_view.cfm?Story_ID=154

About SPSS

SPSS Inc. (NASDAQ:SPSS) is the world's leading provider of predictive analytics technology and services. The company's predictive analytics technology connects data to effective action by drawing reliable conclusions about current conditions and future events. More than 250,000 commercial, academic, and public sector customers rely on SPSS technology to help increase revenue, reduce cost, improve processes, and detect and prevent fraud. Founded in 1968, SPSS is headquartered in Chicago, Illinois. For additional information, please visit www.spss.com.

SPSS information is available on the World Wide Web through the SPSS Press Center at: www.spss.com/press