Optimization of retail processes has become the key to success. The article covers seven pricing tools capable of winning the market share.
The optimal price is a powerful instrument, which can boost ROI right away. However, the process of price optimization can easily grow into the trickiest problem. And that’s why.
How Retailers Set Prices Today
Businesses need to have sufficient historical data on the subject at hand. Tools to collect data vary, and in most cases, pricing managers align their activities with both manually and automatically gathered data. And here’s the first challenge: how to analyze a raft of information on time?
To keep up with the market, retailers often focus on expert-based pricing, brushing aside a substantial proportion of data. On the one hand, there’s nothing wrong with it, since they are caught between a rock and a hard place, where the former is KPI, and the latter – the urge to set optimal prices. But because this process is ongoing, usually managers have no time left for the thorough analysis of the guesswork they do. Therefore, there’s a little room for corrective actions and significant improvements. A bottleneck, created by this dilemma, often constitutes a vicious circle of failures and perpetual mistakes.
Ironically, it takes months to learn the ropes of this imperfect process. Whenever there’s a need to put new team members into the picture, retailers lose one of their most valuable resources, the time.
We’ve listed some of the companies saturating the market with high-quality tools.
Competera provides AI-driven price recommendations enabling brick-and-mortar and online retailers to formulate optimal prices based on consumer behavior, seasonality and competitors’ activity. The company’s clients see their revenue grow by 5-15% with 300%-900% ROI. The results usually depend on the client’s initial business indicators, their efficiency, and decision-making speed.
Revionics claims retail to be a hostile environment where tech-savviness is must-have. They help meet the demands, introducing their tools for automated dynamic pricing, promotions, and markdowns, along with competitive insights and advanced analytics.
Revionics specializes in all retail segments, promising to break the cycle of ineffective promotions by understanding how things work.
PROS positions as an AI platform for the digital economy, offering their set of tools for price optimization, along with guidance and opportunity detection for different sectors.
PROS Control supplants spreadsheets and manual inputs with one tool enabling to carry out all-encompassing and coordinated price management and execute a winning pricing strategy. Airlines & Travel industry is their specialty, with sound analysis of airlines ever-bumpy market and relevant tools. For instance, Airline Shopping is a repricing solution enabling clients to implement an automatic ticket price change and monitor ticket refunds and cancellations.
In addition to price optimization, Zilliant IQ Engines implements AI algorithms and predictive analytics to evaluate the real financial potential of an individual customer, and accordingly develop a strategy, leading to the profit. This solution can benefit the following industries:
• Industrial Manufacturing;
• Industrial Distribution;
• Food Service Distribution;
• Building Products Manufacturing;
Cart IQTM also processes and analyzes client’s data, giving relevant guidance and keeping eCommerce platform in order.
5. Blue Yonder
Blue Yonder enables retailers to shorten the number of products being out-of-stock by 80% and increase the profit by at least 5%. Their solutions are said to help improve customer value and boost up profits, implementing market-leading AI/ML.
Blue Yonder offers services for both supply chain and buying and merchandise, tailoring price optimization for every individual product. Demand Forecast & Replenishment allows evaluating the optimal order amount for an individual store on a daily basis with no manual engagement. The order amounts are evaluated considering the optimization of competing goals such as returns and out-of-stock goods.
Vendavo Segmentation Manager allows creating segmentation models reflecting individual financial strategy. Retailers can develop and test price segmentation models, and modify them at any instance. After the model has been successfully tested, you can set up segment-specific prices, using Vendavo’s Price Optimization Manager TM, setting a desirable price for each deal.
The provider has also introduced some other operational tools, such as Vendavo PricePointTM, a cloud-based solution enabling coordinated pricing management and deal guidance across complete product lines, and Profit AnalyzerTM allowing examining and eliminating unnecessary discounting, undesired price divergence, etc.
7. Price f(x)
Price f(x) styles itself as an “unconventional software company” with an ambition to “become and stay the leading SaaS pricing and CPQ solution provider”.
To reach the goal, they’ve built some handy tools: PriceAnalyzer, PriceOptimizer, PriceBuilder, PromotionManager and others, — which all together create a full suite price management kit for every stage of sales management, from planning to realization.
Each of the above-listed companies does its best to meet the challenges of today’s busy market and give a comprehensive answer to the clients’ questions.
The key pillar is straightforward and direct: automated price optimization based on machine learning has become an integral part of the trade, offering:
- all-round trustworthy information;
- massive time and cost savings;
- powerful personalized growth strategy;
- consumer behavior forecasts;
- easy-to-understand and easy-to-use management techniques.
In the meantime, digital price optimization continues to march on, this time strengthening its position as a supply chain tool.