Priced to Win
With a seemingly endless number of ways for consumers to access product information, retailers are hard-pressed to deliver the most effective marketing and pricing strategies. With the help of an automated intelligence tool that streamlines the highly complicated data-gathering process across digital channels, retailers can gain access to the critical competitive information required to optimize their online merchandising and marketing processes.
Omni-channel retailing is experiencing double-digit growth and is generating more product information than ever before. Shoppers are using computers and mobile devices to access e-commerce sites, social media and even online customer reviews to make purchase decisions. More than nine in 10 customers trust reviews from people they personally know, and 70 percent of customers trust online reviews from people that they do not know directly, according to Nielsen Wire.
While this new digital environment opens up opportunities for retailers to connect with shoppers on a more personal level, it’s also causing its share of challenges. “The top areas of concern for cross-channel retailers are showrooming, where shoppers enter a store to try on or test merchandise before purchasing it electronically, and inability to compete with the likes of Amazon,” says Gilon Miller, CMO for Upstream Commerce, an artificial intelligence solution provider. “Aside from its economy of scale,” he says, Amazon “offers competitive shipping and automated pricing strategies that are difficult to replicate.”
Historically, retailers relied on personal experience, “gut instinct” and manual tracking to optimize pricing and assortment practices relative to their competitors. But beyond the inaccuracies this manual process created, it didn’t allow retailers to monitor competitors on a timely basis, taking a further toll on effective price changes.
A LinkedIn poll sampling 50 retailers reported that 24 percent of respondents track their competitors’ pricing strategies daily; 30 percent conduct this process once a week, and 18 percent monitor competition only once a month. By automating this task with a retail intelligence tool focused on analysis and data mining, retailers are in a better position to compete from price, assortment and marketing perspectives.
The Upstream Commerce Retail Intelligence Suite is a cloud-based software-as-a-service (SaaS) solution that uses advanced artificial intelligence, semantic analysis, data mining and image-recognition algorithms to deliver real-time competitive price monitoring and analysis, as well as product and assortment intelligence. The solution collects competitor product and pricing-related data, and allows retailers to do real-time analysis to make competitive pricing decisions designed to increase sales and grow profit margins.
More complex than web scraping solutions that extract data from websites for later analysis, Upstream’s Retail Intelligence Suite uses three components to aid its retail customers. In addition to data extraction of competitors’ e-commerce sites, the software pulls data from comparison shopping engines and conducts data matching through data mining, semantic analytics, image recognition and artificial intelligence.
“Relying on simple keyword matching or manufacturer number or Universal Product Code matching is not practical in many cases and often does not provide accurate results,” Miller says. “Our technology delivers above 99 percent accuracy, even when the data is partial, noisy and unstructured.”
Upstream Commerce has customers worldwide, but 70 percent of its portfolio is comprised of retailers based in the United States. Merchandising, e-commerce and pricing executives across larger retailers in this group are accessing the software, and top management and department managers at small and mid-size retailers are teaming up to use the solution to make better business decisions. Retailers using the suite have experienced up to 20 percent sales and profit margin increases, according to Miller.
Upstream Commerce plans to enhance its suite with additional tools like promotions intelligence in hopes of helping its retail customers maintain a competitive edge. “If a competitor is driving an aggressive promotion, you want to … react in real-time, not after it occurred,” Miller says.
By leveraging the suite’s predictive analytics and benchmarking capabilities, the solution can make recommendations on different price changes. Miller also says the solution will make automated changes a reality.
Similar to the strategy that has been linked to contributing to Amazon’s success, Upstream also plans to utilize its predictive capabilities to offer customers an option to streamline automated changes. “By merging customer behavior and conversion data with analytics, retailers can compete more effectively in the future, and stay a step ahead of their competition,” he says.