Pricing intelligence for retailers has become a booming business in its own right. A soaring U.S. economy is expected to push market revenue beyond $530 billion in 2020. Even so, keeping online sales rolling will require more than a good economic environment, it will require pricing intelligence.
Let’s take a quick look at the history of online price-setting. Then, we will see which five companies are using new technology to dominate this niche industry.
Pricing Intelligence Overview and History
In the early years of online retail, setting product cost was all art and no science. Retailers set their prices based on their desired profit margins, and on manual surveys of competitor prices. Achieving positive results was time-consuming and unreliable.
Then came some science.
Realizing the need for automated price-setting, developers began marketing price scraping software and setting consumer cost for products became more scientific. Scraping programs automatically retrieve competitors’ pricing and product information. The scraped data can be posted to an ecommerce site in near real time.
Despite automating the price-matching process, scraping has some major disadvantages if not used with other technologies. Tailoring scraped data for your site often requires careful analysis and manual adjustments to achieve good results.
Price scraping has proven to be a faster way to set competitive prices, but not necessarily a smarter way unless supported by automated pricing solutions.
Pricing Intelligence Software
New technology is making pricing almost entirely scientific, with little room left for human involvement. Modern pricing intelligence tools combine big data, cloud technology, and artificial intelligence to set price points.
Some applications also include other tools to form a “business intelligence” package. Such products may include automated product descriptions, content management, and other tools for automating an ecommerce site.
For our conversation, we will focus on pricing software, which offers the following basic advantages:
- Automatic and real-time monitoring of market prices for your products.
- Powerful analytic tools to help forecast optimum pricing in advance.
- Dynamic pricing solutions that help you set the optimum price, not necessarily the lowest price, for each customer.
Unlike most scraping software, pricing intelligence is more than data collection. Thanks to AI, the technology can intelligently decide how to use that data to set the optimum prices for your site.
While not all package include AI or big data analytics, those that do not are more limited in what they can do for you. That does not make them the wrong choice. It does makes them more suitable for smaller companies with simpler needs.
Among the growing list of AI applications in Ecommerce is dynamic, rather than static pricing.
Dynamic pricing can look to big data to provide information that affects your marketing strategy. Among the factors it can consider are these:
- Your desired profit margins
- Your overall marketing strategy
- You competitors’ prices
- Market trends that are likely to affect sales
- The geographic location of each customer
- The purchasing habits of each customer
- Supply chain issues that can affect the availability and, thus, price
- Seasonal demand for your products
- News items that could affect you, your customers, your competitors, or your suppliers
- Weather forecasts that can affect product supply or market demand.
As you can see, AI-powered dynamic pricing considers all the factors that can affect what your customers will pay for your products, rather than just a few.
Speaking of your customers, AI technology can post the optimum price for a given product that a given customer is likely to pay at a given time. In other words, a customer located in snow-covered Alaska is shown a higher price for a pair of fleece-lined gloves that would be presented to a customer in Florida.
Likewise, the same customer in Alaska would be asked to pay less for the same gloves in June than in January.
Fair? Maybe not. But selling isn’t about fairness, it is about value. Since each customer has unique needs, why not tweak your prices accordingly? In the end, the value customers receive is much greater than what fixed pricing can provide.
Best of all, dynamic pricing sets your prices automatically, responding in real time to factors that affect your products’ value.
Pricing Intelligence Software Companies
The advantages of pricing intelligence solutions have spawned a growing list of pricing intelligence companies. The following companies are each carving out a piece of the ecommerce market for themselves.
Depending on the focus of the company, every feature we have discussed may not be included in a particular product.
To be frank, the name may annoy you. But the UK-based pricing analysis platform has enough under the hood to make up for it.
The Skuuudle platform offers these features, among others:
- Data retrieval from any marketplace or competitor website.
- Monitoring for specific products or for entire groups of products.
- Real-time monitoring of competitor price changes.
- Takes into account shipping fees.
- Accurate identification of like products, even with different descriptions.
Skuuudle uses not only AI, but deep learning to learn your customers’ and your competitors’ behaviors over time. The result is an automated pricing engine that gets better every day.
The Skuuudle AI platform is a full-featured solution. A host of reporting and analysis tools are included.
Competera taps cutting-edge technologies to offer a multi-featured pricing platform. Cloud, AI, and big data technologies are tapped to provide real-time pricing insights.
A variety of price-centric tools are all designed to help you price your products for a market edge. Competera uses complex technologies to make easy work of setting your prices dynamically.
The platform is divided into these feature sets:
- Competitive Data features provide anh variety of data collection options.
- Price Intelligence provides valuable data on your competitor’s pricing.
- Price Management allows managers to plan optimum pricing strategies.
- Price Optimization monitors, analyzes and integrates with your platform.
Data scraping, 360° market analytics, rule-based and AI-driven price recommendations are just a few of the powerful capabilities offered by this pricing platform.
3. Price Manager
Price manager does not have all the bells and whistles that some pricing platforms do, but that’s OK. Sometimes you don’t need them.
Some online retailers just want to monitor their competitors’ prices and integrate that data into their platform. If that describes you, Price Manager’s intuitive platform might be just what you need.
Features enable include:
- Monitoring single products or selected categories.
- 24/7 tracking of prices on competitors’ marketplace sites.
- Tracking of products in over 30 countries.
- Easy data exporting and integration.
- Email alerts.
Price Manager offers other features, as well. And while it may not be the most powerful solution in our list, it is ideal for many small-to-medium ecommerce companies.
Minderest offers a robust and flexible platform, complete with dynamic pricing features.
The Minderest platform offers these features, among others:
- Monitoring competitor prices, promotions, and stock levels.
- Monitoring competitors in other countries with differing currencies.
- Accounting for shipping costs.
- Advanced rule-based algorithms optimize prices 24/7.
- Profit margin optimization so you never lose money on a sale.
With the Nielsen Company and L’Oréal on their client list, they may be worth considering for your online store.
5. IBM Dynamic Pricing
IMB has capitalized on its Watson AI cloud platform to serve a wide variety of industries and applications. Now dynamic pricing AI for ecommerce has been added to the list.
The IBM platform offers these features, among a host of others:
- Real-time dynamic pricing.
- Monitoring competitors’ prices and changing market conditions.
- Intelligent monitoring and analysis of your customers’ behaviors.
- Integration with IBM WebSphere Commerce platform.
- Allows condition-based scheduled automated pricing actions.
There is not much that needs to be said about IBM’s expertise in big data, cloud technology, and AI. For ecommerce companies that might need to scale up, the IBM Dynamic Pricing platform can handle you pricing needs now, and as you grow.
The lucrative ecommerce market has created a booming opportunity for innovators and investors who can provide AI retail pricing optimization solutions.
But this isn’t a new player’s game.
Cloud technology, AI, and big data require experience to implement well. That is where Ignite comes in. We offer outsourcing solutions to partners around the world.
Whether you need an ecommerce site or a custom pricing intelligence B2B solution, our world-class developers can deliver.
We operate six R&D labs across Europe, which enables us to serve you regardless of your location.
Why not contact us today for a no-cost consultation?