A funny thing happened to me at the eTail West conference in San Antonio, Texas earlier this month: I realized that many retailers don't fully appreciate the vast differences in the capabilities and offerings of "pricing intelligence" providers. Many of the folks with whom I spoke seemed to think that there are a number of vendors, all doing and offering roughly the same thing. I'd like to tell you that this just isn't so – and why it's important to understand the differences. There is a chasm between those providing strategic, insight-rich price and assortment intelligence capabilities that deliver complete, accurate and actionable insights to enterprise retailers -- and those vendors that call themselves “price intelligence services,” but only do simple scraping of price comparison websites, providing data that is largely incomplete, inaccurate, and not terribly actionable.
So, in the spirit of setting the record straight, let me share some actionable insights…
Here are five questions every retailer should explore when evaluating retail intelligence solutions:
1. Is it a pricing intelligence tool that starts and ends with website scraping? Scraping is the coarsest form of intelligence gathering – and it is not enough to deliver insights.
2. Does the tool gather data from comparison websites only? Like sand, you'll get many, indistinguishable grains, already sifted and distorted -- and not even from the original source. And, don't kid yourself… it's hard to get the information you need from competitors’ websites and other reliable sources – many products are not identical and, hence, easily compared. The data can be noisy and it can be partial. The best pricing intelligence tools cut through this and present the data in usable, comparable form.
3. Is the data "quality assured”? While pricing intelligence tools automate the process of collecting data, human-based quality assurance is still necessary to verify and ensure 100% accuracy. Even the smallest mistake, mismatch, or error will throw off your data – and the value of your insights.
4. What is the solution’s flexibility and scalability? Can it manage hundreds of thousands – or even millions – of price points and products in hundreds of different categories? Can you start small and then scale up as your business and sales grow, and you add more products to be matched and compared – all this without compromising quality and performance? A sophisticated pricing tool should be able to grow with you – and vice versa.
5. Is the solution highly configurable and compatible with your existing technology? Does it allow you to define rules for automated, dynamic pricing? Does it help you explore different business scenarios so you can better understand the business impact of pricing and assortment decisions – before implementing them? Does it seamlessly integrate with your e-commerce platform so you can implement automated re-pricing? In other words, is it a true strategic retail intelligence solution, or simply a tactical price monitoring tool?
Bottom Line for Your Bottom Line
Pricing intelligence solutions are not all the same, nor is the price you pay for these services. Retailers should understand what is possible, what is being offered, and the corresponding value and cost. A robust retail intelligence suite should provide retailers with a complete, configurable, scalable and insight-rich solution that delivers truly actionable insights. Executives and professionals in pricing, merchandising, buying, e-commerce and financial roles should be able to decide and act – with complete confidence – on fact-based, real-time competitive insights.