- Posted by Tim Manning
- On September 3, 2015
- price optimization, retail pricing software
Retailers are swimming in data and yet have less actionable information than necessary to compete effectively in today’s omnichannel retail pricing environment. Why? Online transparency has generated more data: rich store-SKU sales history, product attributes, competitive price history, online browsing and online purchase behavior. In addition, competitive price-scraping technology has evolved and provides improved data quality with increased frequency. Retailers need the ability to quickly convert this expanded data into action steps.
Merchant Intelligence: Exception-Based & Actionable. A new level of retail intelligence is required which is dynamic, exception-based and actionable. A retail-specific form of business intelligence which re-invents retail pricing software and dynamic pricing. One which shifts the 80/20 paradigm, so merchants spend the bulk of their time on strategy, not sifting through data. Retailers need merchant intelligence.
Recent retail science –using evolved statistical model-based approaches –has combined with current business intelligence technology to deliver such merchant intelligence. The raw data remain historical sales data and competitive pricing information – routinely available to retailers – but the level of strategic insight is now significantly enhanced.
Consider these strategic questions that we hear from retailers:
- I need to find my highly sensitive SKUs (KVIs) in a specific category that are not competitively priced;
- I need to find my SKUs– irrespective of price zones- which are best suited for driving profit, without eroding my price image;
- I need to find my SKUs, which are priced inconsistent with their price family, following a cost change or competitive price response; and,
- I need to find SKUs across my enterprise zones, which are misaligned with their intended zone-level price index.
Merchant intelligence is laser focused on such answers, so merchants can find the “needle in the haystack” and not just find another “haystack”. The result is a relevant toolset which helps retailers accelerate the development of strategy; monitor prices to ensure strategy compliance; and generate incremental and sustainable revenue and profits.
Price Delivery Systems Benefit with Better Inputs. Retailers have embedded pricing systems and processes that are effective at executing merchant directives and executing prices. However, their output is a function of the quality of the input. Worst case: garbage in, garbage out. Merchant intelligence, as Clear Demand proposes, is a discussion for improving the input and not replacing the delivery systems – unless these systems cannot respond quickly enough. It is possible to leverage those delivery systems – including retail price optimization – make them smarter with merchant intelligence and deliver competitive advantage!
Winning in Retail. Understanding the Data. “Merchant intelligence helps retailers gain competitive advantage by accelerating category strategy, automating pricing consistency and compliance, reducing retail price management, and aligning prices with customer demand,” said Jim Sills, co-founder, Clear Demand.
- Whitepaper: Exercising Price Leadership
- New video: Retail Price Strategy & Cost Changes
- Webinar: Pricing in an OmniChannel World: A Retailer’s Survival Kit
Our blog commitment is to provide useful, thought-provoking perspectives and resources for retailers. Please send your thoughts or comments to me directly at email@example.com.