Why Are Retailers Afraid To Set Up Their Pricing Intelligence Solutions?

In our increasingly complex retail landscape, it makes sense for retailers to use only the best intelligence solutions to help access information and insights, identify and address opportunities, and mitigate challenges -- with the express goal of being more effective and efficient than their competition. It seems that the retailers' concerns revolve around proprietary data, costs, customer reactions to their strategies and comfort using cloud-based solutions -- rather than with the tools themselves.

Let's take a look at some of these retailer concerns and how they line up with reality:  


(If we establish this intelligence function in-house)...

1. Our internal systems will be more complex and at odds with what we already have.

2. This technology will be costly to establish, use and maintain.

3. Who's going to oversee it?


Retailers will have to modernize what they've got, integrate their pricing intelligence with other functions and systems already in existence, see that everything works smoothly together, and make sure that everyone in the company is able to use and access as appropriate.  

Apart from the giants, very few companies can afford the cost of establishing and maintaining this IT, what with the need to integrate, manage, and run the systems, gather the actual competitive information; interpret, understand, and act on the data, while simultaneously staying up to date on technical developments and advancements.   


(If we use a Software-as-a-Service solution)...

4. Our proprietary information or tightly-held company strategy will be "out there" for our competition to see.

5. We will lose control of our own destiny.

6. SaaS solutions are the same for all customers.

7. An SaaS function will be costly to establish, use, and maintain.


Retailers want to "own" the solution. With SaaS, retailers have the biggest say of all in what they compare, with whom they compare, what kind of rules to set, and what best fulfills their pricing strategy.

Retailers think the solutions are the same for all customers, but nothing could be further from the truth.  Data administered by sophisticated pricing intelligence services is custom-made, unique to that particular client and dealing with the particular client's problems; it is highly confidential and vitally protected from security breaches.

Cloud solutions are not capital intensive, are faster and easier to implement and maintain.

SaaS helps save research cost, time and energy -- presents information in an easy-to-use operational framework that is already set up and designed to deal with these issues.


8. Fear negative customer reaction to changes in our pricing strategy. 


With SaaS, retailers have access to the best tools available for strategizing, decision-making, and real-time action -- covering pricing intelligence, assortment intelligence, lifecycle intelligence, dynamic pricer, business scenario management, MAP monitoring, and more.      

What are some advantages for retailers of using Software as a Service (SaaS) instead of bringing the function in-house?


1. Designed and maintained by people who specialize in the particular solution, which is purpose-built, sophisticated, deep, and is changed and grown with the circumstances.

2. The retailer calls the shots and makes the decisions about pricing rules, pricing, etc. with instant access to the information and answers they need.

3. Retailers receive guidance and support from experts whose only job is to help them make their own decisions and actions in a timely (including real-time) manner.

4. Comes with technologists attached. Retailers don't have to worry about finding, hiring, maintaining, and keeping technologists for their staff.

5. A lot of the value of a retailer's pricing intelligence comes from data outside the enterprise, much more easily accessible by a service.

Bottom Line For Your Bottom Line:

When retailers fully understand the benefits of top line pricing intelligence, they will get their competitive solution set up and running as fast as they can.

Even though the largest enterprise retailers have the capability and dollars to acquire, set up, and run these solutions from within, most of them, for the reasons given above, will choose cloud-based solutions to provide their pricing intelligence services.

The best provider is one whose ONLY business is to concentrate on pricing intelligence and the systems that fulfill this function. The provider provides everything you need for your pricing intelligence in one stop. Leave the heavy lifting to the service so you are free to make the important decisions easily and effectively, the ones that will help you optimize pricing and increase your profits.  

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Amos Peleg, Co-Founder & CEO

About Author

Amos Peleg co-founded Upstream Commerce following 15 years of leadership roles in operations and global team management in the software industry. At Mercado Software – later acquired by Omniture, Inc. (now Adobe) – Amos served as General Manager of Mercado Labs and was responsible for the company’s operations. Mercado Software, a provider of advanced merchandising solutions, counted among its customers Macy’s, John Lewis, Williams-Sonoma, Argos, Overstock, Guess and Sears. Prior to Mercado, as Director of Small-Business Technology Platforms at SAP, Amos managed the group responsible for international engineering programs. Previously, at Check Point Software Technologies, he drove the technical development of two core products and was responsible for the conception, architecture, development, and market delivery of all new products. Amos holds a M.Sc. degree in Computer Science from the Weizmann Institute of Science and a B.Sc. in Physics and Computer Science from the Hebrew University of Jerusalem.
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