Editor's Note: We recently received some great questions on our Competitive Pricing For Online Retail LinkedIn Group Site -- worth sharing with our wider audience. Questions such as: 1. What should you do if your competitors change prices every hour or even every minute (i.e. dynamic pricing)? 2. When performing competitive intelligence, how can you ensure apples-to-apples matching in soft categories? 3. Do retailers that carry unique products need this solution? 4. What happens in omni-channel business where price zoning is involved? 5. What are the key features you look for in pricing intelligence tools? See the insightful answers from seasoned retail intelligence veteran, Amos Peleg, CEO and co-founder of Upstream Commerce.
1. What should you do if your competitors change prices every hour -- or even every minute?
Amos' Answer: Sometimes you would like to react fast, but oftentimes you wouldn't. There are many considerations in selecting price-changing frequency, such as end-to-end shopping experience and convenience, and the time it takes to obtain reliable and significant information about the effect of the price change on revenues.
Oftentimes, there are more strategic considerations, such as the price image of the company. A hybrid approach can be used, where price changes are done with a moderate frequency, while the retailer may still react immediately to very significant price events at competitors'. The tool you choose for online dynamic pricing optimization will need to be able to cope with the difference in the frequency of change that you choose, and the change frequency of competitors price on their Websites. There are multiple approaches for doing that.
2. When performing competitive intelligence, how can you ensure apples to apples matching in soft categories?
Amos' answer: Assuming you mean matching exact same products - there are multiple cues for matching, including strong use of linguistics and reliance on product attributes to compare the semantics of the products. If you mean similar matches rather than exact same matches, then here again, it's a combination of attribute and semantic linguistic comparison.
3. Do retailers who carry unique products need this solution?
Amos' answer: Often there is real value in comparing similar products for pricing or for building catalogs and developing private brands.
4. What happens in omni-channel business where price zoning is involved?
Amos' answer: Zone pricing is reflected in Web sites more often than before. It occurs as retailers are moving to true omni-channel solutions, where the functions of the different channels support each other. As an example, Home Depot's Web site will present you with the exact price and availability of products in every individual brick-and-mortar store. True omni-channel implementations may include support of Webrooming, where fulfillment of online orders is done through the offline stores, with price zoning taking effect.
5. Is anyone (who's reading this) using a price or an assortment intelligence tool? What are the key features you look for in such tools? (This was the original question posed by Aparna S. of an international software service and consulting company).
Amos' answer: Thank you for your questions Aparna. You'll find some great (objective) answers to your question about the key features to look for in price or assortment intelligence solutions at:
Editor's Note: About Upstream Commerce: Global retail intelligence leader, Upstream Commerce offers SaaS-based intelligence and analytics solutions that transform the way retailers price, select merchandise, and manage products in order to maximize sales and optimize margins. For more information, go to www.UpstreamCommerce.com