Competera offers retailers a comprehensive pricing platform for all their pricing needs. Competera’s pricing platform provides high-quality competitive data, competitive intelligence, price monitoring, and price optimization that is highly customizable according to every individual company’s needs. Timely data delivery, 98% accurate competitive data, a strong SLA, and solid customer support services are highlighted as a few of the key features Competera presents to its clients.
Revionics is an American-based pricing software provider for retailers and specializes in AI-based pricing software. Revionics® Price Optimization utilizes AI, data, and business strategies to offer optimal prices for products. They offer clients the ability to customize of categories, channels and items according to their business needs. Revionics price optimization software provides insights such as…
Pros offers quick and precise price optimization software for retailers looking to utilize dynamic pricing. They have over 30 years of experience in developing algorithmic tools and software, making them one of the most seasoned price optimization software providers on the market. Their price optimization software promises to provide retailers with increased profit and sustainable…
Blue Yonder is an AI and ML-based price optimization software provider allowing retailers to increase their revenue through advanced pricing analytics.
Their price optimization software is fully automated and features demand forecasting and competitor product analysis reports, as well as profitability analysis.
Pricefx offers an ML-based price optimization framework to improve the product portfolio and pricing of businesses. They offer “segment-specific” optimized pricing and price recommendations which can be exported to and delivered in multiple formats including but not limited to ERP systems, CPQ, and price lists. With Pricefx price optimization software, businesses can obtain and model
Dataweave is an India-based company offering eCommerce retailers analytical tools via publicly sourced information scraped online. Founded in 2011, they offer a simpler, cheaper alternative to advanced pricing software which can be used to optimize a retailer’s pricing strategy and obtain key insights on competitors and market conditions.
Based in the UK, Pricefy seeks to provide retailers with the software they need to monitor their competitors and their market “on autopilot.” They were founded in 2017 and focus on eCommerce retail within the UK and European market. The company claims to be able to harness the power of big data to help eCommerce…
Omnia is a Netherlands-based company, improving retailers’ pricing processes since 2013. Their mission is to give retailers the tools they need to save time, money and headache so they can take control over their pricing and online marketing. Being based in the Netherlands, Omnia Retail focuses on the European retail market, but is continuously expanding as their customer base grows.
Founded in 2012, Intelligence Node is a consultancy dedicated to helping retailers perfect their pricing strategy. Using technological solutions, they seek to make pricing more comprehensive for e-tailers. Intelligence Node seeks to go beyond giving retailers automated solutions, but to also provide consulting in order to create an optimized pricing strategy. The company is based…
Wiser offers a multitude of solutions for mid-size and large omnichannel retailers. Founded in 2013, the U.S.-based company ensures that clients using their software will be given data quickly and with high accuracy. Their software collects and analyzes data online and in-store to help retailers perform a multitude of pricing-related tasks, such as tracking MAP,…
What is Pricing Software?
Pricing optimization software products are used by businesses to manage pricing in a coherent, automated, flexible, and effective way. Pricing software helps companies to keep prices optimal, grow key business metrics, minimize human involvement, and react to market changes proactively.
The history of pricing software traces back to the mid-1990s when the early prototypes of modern solutions were released. The first wave pricing software was capable of processing historical data but remained rough in procession and daily use. The second wave of solutions appeared at the beginning of the 2000s. Airlines companies were the first to adopt pricing software capable of generating prices for flight tickets based on the mix of changing factors. But poor ROI and difficult integration prevented these prototypes from massive adoption. Eventually, the first third-wave solutions were released in the 2010s.
Today, there are plenty of solutions on the market offering a wide range of features and tools for various business needs from price monitoring to price and product intelligence. Being easy in integrating and use, third-wave dynamic pricing software is more often preferred to other alternatives, e.g. in-house pricing systems. Pricing optimization software is used across various businesses with the retail industry being a leader in implementing pricing solutions. The mass adoption of pricing optimization software in retail can be explained by the fact that it helps to both gain financial growth and retain customer groups.Pricing optimization software features may include:
- Automated rule-based pricing campaigns
- Performance analytics and goal tracking
- Assortment segmentation
- 'What-If' scenario simulation tool
- Event-driven repricing campaigns
- Price management on the store/channel/pricing zone level
- Demand-based pricing campaigns
- Workflow and process management
- Markdown and promo optimization
- Cross-product and cross-channel consistency
- Import/export support for other systems (e.g. ERPs, CRMs, etc)
What is Pricing Optimization Software?
Pricing optimization software helps businesses to find optimal price points by using advanced algorithms and best econometrics practices. Such algorithms in price optimization software (often powered by artificial intelligence and machine learning) can determine and predict dozens of pricing and non-pricing factors, like demand dynamics or price elasticity within the portfolio.
Even though the terms 'pricing software' and 'pricing optimization software' are often used interchangeably, the latter term has a more narrow meaning being applied to the most advanced examples of dynamic pricing solutions, such as retail pricing optimization software.
For example, in contrast to more simple repricing tool, pricing optimization software enables both traditional and ecommerce retailers to run pricing campaigns based on demand and price elasticity which can increase revenue by 15% and a profit margin increase by 5% in the long run.
Profit/Advantages of using Retail Pricing Software
Retail pricing software remains the best retail pricing optimization tool to increase key business metrics by means of pricing. The key advantages of using pricing software include:
- Transparency and value insights for management and operations
- Structured approach fostering pricing transformation
- Coherent and unified price management across all channels, price zones, or geographical regions
- Parametrized & calibratable pricing logic to leverage pricing power
- Multiple pricing logics allowing efficient time and effort allocation for pricing
- Pack size/caliber explosion logic for effective SKU price differentiation
- Logical and consistent approach supported by corporate-wide integrated maintenance
- Scalable and expandable price management system allowing integration with other systems (e.g. CRMs, ERPs, etc)
These are the general benefits of dynamic pricing software. Specific advantages might be different depending on a company's pricing strategies and business goals. For example, retailers facing overstock typically utilize dynamic pricing software to run smart markdown campaigns to sell goods with the highest possible margin based on demand patterns and deadlines.
Best retail pricing tool for Retail Industry
|4||Blue Yonder||Learn More|
|8||Omina Retail||Learn More|
|9||Intelligence Node||Learn More|
Price optimization software features comparison
|Pricing scenarios simulation (sandbox)|
|High prediction accuracy|
|Low consultancy for implementation|
|Quick integration (up to 8 weeks)|
|ROI-based pricing model|
Price Optimization and management for Pricing Strategies in Retail
- Pricing Optimization
- Competitive Intelligence
- Retail Management Systems
- Competitive Data Analysis
- Price Tracking
- Dynamic Pricing
- Price Intelligence
Price optimization seeks to predict how customers will react to different prices set for a product using mathematical analysis. Determining this helps retailers understand what prices would be optimal for their products according to their pricing strategies and business goals, whether that be to increase sales, increase profit margins, etc. Traditionally speaking, price optimization and management were done manually, collecting external and internal data and making calculations for products using excel sheets and sometimes with the assistance of simple software.
However, conducting price optimization has become more complicated within the past few decades, and as a result, the software used to make these calculations has become more advanced as well. The first companies to utilize price optimization software typically had diverse product lines as well as broad target markets. Advanced software for price optimization is not exclusive to retail giants anymore, however – analysis shows that even prior to the 2008 recession, the global market experienced a rise in competition, which pushed companies to search for new business approaches.
This increased complexity and volatility in retail resulted in a gross drop in profits for manufacturers and distributors alike. As a result, more and more retailers of all sizes worldwide are beginning to integrate pricing optimization software into their pricing strategies to remain competitive in tough markets with unforgiving profit margins. Price optimization algorithms can be considered one of the most crucial areas to invest in for companies that are still relying on ad hoc analysis and spreadsheets for their pricing needs.
The pricing optimization software is a system aimed at increasing business profits by analyzing the market condition of dynamic prices and formulating an effective pricing strategy on this basis. This is a great alternative to traditional methods of price optimization, which consist of manual settlements.
The pricing optimization software is suitable for businesses of all sizes, from online clothing stores to supermarket chains. For this, a whole complex of pricing data is used, obtained as a result of monitoring the price range in the market, the range of products, and pricing conducted by competitors. Also taken into account are factors such as the behavioral mood of potential consumers, analysis of sales indicators during the campaign, changes in market conditions, and the economic situation in the country.
Thus, based on the data obtained and processed with pricing optimization software, retailers can set the optimal price for their product, the most favorable and attractive for consumers. The introduction of price optimization tools software allows you to develop an effective dynamic pricing strategy for promoting a product or service on the market and, as a result, helps to increase the company’s profits.
What is price optimization in the deeper term?
For most companies, there is still plenty of room for improvement in their pricing strategy.
That’s where pricing optimization methods come in. When you find the right pricing balance between what people are happy to pay and what your company can make money for, everything becomes much easier. Sales and marketing, profitability, and growth.
Price optimization is the process of analyzing your customer and market data to find the best possible price point for your product or service, meaning that you sell more products without sacrificing production costs. The goal of price optimization is to figure out the best price that will generate the most sales and success.
Successful price optimization is about finding the balance between price and profit. It’ll have a major impact on your sales, customer satisfaction, and profitability. The success of it can also affect your level of possible growth.
The process of optimizing pricing isn’t always easy. The marketing research analysis is crucial for understanding both your business and your customers. Pricing your products or services isn’t always straightforward, but it can be quite easy with the right tools and knowledge about the concepts of pricing.
Price optimization starts with a list of the information you’ll need to have. That includes things like:
- Customer survey data
- Demographic and psychographic data
- Historic sales data
- Operating costs
- Machine learning outputs
- Subscription lifetime value and churn data (for subscription business models)
Pricing optimization programs are similar to dynamic pricing strategies that other industries use, except dynamic pricing in other industries tends to fluctuate a lot more frequently than it does in the case of price optimization.
To price your product optimally you need to understand how consumers might react. Applying basic economic principles to pricing your product or service will make it easier for you to decide how much trying to charge.
The history of price optimization: the road to optimized prices
Since the beginning of commodity-money relations, the price has always been at the center of attention. Therefore, price optimization is not a new phenomenon, but a historical one. Humans have always been able to know the worth of an object based on how much a customer is willing to pay. One example where people were engaged in pricing is auctioning. Auctions were invented millennia ago and they’re still seen as interesting today even if they’re not used very often.
For a long time, many business owners have implemented fairly basic strategies like using markup on the case cost and forecasting to achieve their own KPIs.
It is only natural that sellers, as well as buyers, are unhappy when they have to sell goods at auction. The idea of posted prices was developed to eliminate this problem. These enabled a fair price to be agreed upon so more people can buy. This process streamlined the sales time, which maximized profit per sale.
Over technological time, trade evolved and expanded with the number of markets growing, leading to more variety and improved economic welfare. It should be noted that the pricing policy was based more on intuition, which was not always accurate.
As the number of pricing decisions continued to increase, retailers needed a more reliable and streamlined solution.
For a company managing 1,000 products and making hundreds of thousands of decisions per season, it’s vital to have effective supply chain management. A large, multinational retailer with access to 30,000 products sold in 10 countries across 3 distribution channels and list prices which are constantly changing will make millions of pricing decisions a year.
One of the factors that go into a decision is price differentiation because it is specific to every customer. Many enterprises differentiate their offers and prices accordingly.
To make the most of your marketing, need to research differentiation strategies and prices. That way you can decide whether you want to offer pricing for certain customers or extend it across various product segments. Many factors go into the pricing of a financial product such as regulation, market practice, and the maturity of the pricing function. All these elements factor into what kind of financial decision is made.
At this point, the speed at which price determinants change only continues to increase. This means that industries were having to evolve as often and quickly as possible to stay relevant. Today’s market is constantly changing, which makes it difficult to lock down on prices. For example, the price you set yesterday may not be actual today.
With technology rapidly expanding, more opportunities arise to make informed decisions about pricing your products.
Three things you need to optimize for
Pricing strategy is all about finding that perfect balance between satisfying customers, being profitable, and managing demand. The customer is always right and as a business, we have to listen carefully so we can be sure to provide them with the best possible solution. Building a high-quality product can be a long and tiresome process, so some companies try to strike the right balance. When pricing their product or service, they consider two things: the starting price of their product or service and what the market is willing to pay. In addition, they take into account any discounts or promotions that the company might offer.
The starting price of your product is important as it tells customers upfront whether or not your product/service is worth their time. Before you offer any discounts, your product should be merchandised at the recommended retail price. For businesses that sell products and services which do not vary a lot over time, for example, food, it’s often best to start with the optimization of the price.
In making sales, it is imperative to have information on how best to attract new customers and what is needed for this. Offering your product at a discount or with a freemium version can both be great strategies to bring in customers. Customers who sign up through freemium offerings cost, on average, only half as much to acquire. What makes discounted prices so effective is that they often work well with short-term products. Those would be in line with seasonal and changing trends, etc. This can be observed in the clothing industry, air travel, and tourism. This will allow businesses to get rid of excess inventory for the cost of their customer’s loyalty. The availability of various discounts, over time, must be considered when determining the profit contribution of a product.
What promotions can you offer your customers to make them useful to you as well? It is worth answering the question: will the price reduction bring profit or is it better to keep the initial price? It is also necessary to analyze what kind of discount should be offered to the client. What is the typical length of time it takes for merchandise to sell at a given price? Pricing can be a powerful tool for boosting sales! For example, your company might want to change its prices to promote new products/promo bundles. Temporary price cuts are common in retailing as a short-term promotional measure. They’re aimed at creating the perception of scarcity and urgency, leading to an increase in sales. Promotional prices are a great way to expose customers to new products or bundles. This is true of many promotional tactics though – ‘Buy One, Get One Free is a popular one.
Why many companies fail at price optimization
To sum it all up, more companies don’t want to invest a lot of time and effort into optimizing their pricing decisions. To set correct estimates, customer research is required, which takes time and costs. Unfortunately, many companies only spend a few hours on their pricing strategy each year, which is not enough.
Often companies apply strategies that are based on guessing prices and using discounts without considering the core values of pricing. It would be more appropriate to develop a clear strategy for price optimization.
Most companies underutilize the analytics or metrics they receive from customers. Instead, they mostly guess at the level of the optimal price. We need to be careful when using such approaches. Pricing is a complex and subtle subject, but even guessing at it can work to some extent. This may mean that your pricing policy is well thought out. Businesses must have a sound price optimization strategy for optimal revenue.
Most companies struggle with deciding the right number of pricing tiers they should offer. Find out how to choose one here. It’s important to make sure that you have enough conversion points before you start adding extra tiers to your landing page. Too many or too few options in a product line will result in lower conversion rates. For example, as the number of tiers increases, people will buy less because there are more restrictions and it becomes increasingly difficult for people to find what they want.
Relying heavily on discounts
Discounting can sometimes cause more harm than good. This is because many companies use it incorrectly, on both the point of customer behavior and their own business. Yes, short-term discounts can help you with your initial goals, but in the long term, this could hurt your acquisition metrics and make customers less loyal to your product as a result. Discounted customers have a double-digit higher churn rate than their full-priced counterparts—either they’ve been trained to devalue the product, or they weren’t the right customer for our company in the first place.
Not pricing for value
To better optimize your prices, you can use value-based pricing. This pricing model considers both you, the seller, and your customer. For most companies, determining the price of their product is like a guessing game. But a value-based pricing model will help you know where you should set your prices so that different customers are willing to pay different amounts. Essentially, this maximizes revenue because the right people are buying your product at the best price for them. One issue that many business owners have to grapple with is figuring out what the price should be. It’s not easy.
Not localizing pricing
Localizing your pricing allows you to make a name for yourself in new territories. This is especially true when it comes to growing on a global scale. But this is something a lot of small business owners overlook because localization takes time and effort, which can get in the way of quickly developing your business. However, it’s an aspect that you should consider before moving your company overseas.
This is why so many companies don’t increase their prices largely- they’re afraid of the negative impacts that it will have on their business.
They choose the wrong value metric
Decide on a pricing strategy early on. Understand how you want the price to be aligned with the value your product provides. There has been a lot of research into pricing models, which leads to more and more companies changing their pricing algorithms. It’s important to consider the consequences of your decision before committing to new metrics. Make sure it is the best choice to conduct your business. It’s important to make sure that your pricing is clear and easy for you and your customers to understand. It should also make sense for both parties to decide on the price. Furthermore, you need to be able to measure this value and track it in your system, otherwise, you won’t be able to monetize the information.
How to optimize your pricing
Understanding your audience and where they’re willing to spend money allows you’ll to calculate which pricing strategy will work. Price optimization is about unraveling who your most profitable customers are and working with them to find an individualized experience that matches their needs. A deep understanding of your market is a vital prerequisite for success. For example, retail strategies will differ from the doctrines of large companies. You can use this knowledge to set your pricing, ensuring that you are placing a fair value on our products.
Get to know your customers
Think of pricing as an experiment— each business has different needs and goals. It’s essential to figure out the right number so that you make a healthy profit but are still competitive. Pricing decisions need both qualitative and quantitative data to guide them, like industry benchmarks, competitors’ prices, etc. Analytics is the answer to figuring out what your customers want and how much they will pay for it. This will help you shorten the demand cycle and make your bottom line grow.
Analyzing your data can give you actionable insights into the performance of your business. These insights may include things like what areas need improvement, your churn rates, and more. There are many different types of analytics software out there that make sense of all your metrics and turn them into insightful data. One solid example is Price Intelligently. This would be done by slicing and dicing your customer’s data to provide insights that could help improve your pricing.
Qualitative data obtained during communication with customers is important. Customer feedback is so important, and you’re never going to get a more accurate answer from a survey. That’s why a phone call can often be your best way to get feedback and stay ahead of what they need.
Once you’ve collected your customer data, it’s time to work out how valuable your product is to each customer. Having a clear picture of your business’s value metric is important not only for being able to analyze the effectiveness of marketing efforts but also because it demonstrates your ability to close sales. The indicator of value is how much you get from your product. Pricing a product appropriately is the difference between survival and thriving. Other popular indicators for SaaS businesses include how many seats are on the platform, how many files are hosted, how much bandwidth is being used, and more. Your success metric should be what the customers in the market want and can be quantified to constantly improve upon.
Analyze the data
You have done the research and identified the main features that customers like. Now let’s see if there are any similarities in the features, benefits, price points, and value metrics. The more important ones will come first. You’ll also discover the pricing tendencies of different markets, demographics, and personas which will help you determine what price will work best for them.
You’ve done your market research – now you need to know how to price your product or service competitively. Try using tiers or packages and you’ll see the benefits in your sales. Pricing tiers should cost that which you believe they are worth and align with the customer segments you are successfully targeting.
Adjust pricing and monitor
Even after you’ve set your prices, you still need to keep track of the changes in the market. Pricing needs to be a balance between what your competition charges and what value you provide.
Pricing is a continuous process. Get the pricing right and you’ll have a lot less to worry about. You can think back to the dart board example we did earlier. Pricing adjustment will help eliminate parts of the board. After the adjustments, you can focus on the good ideas for your store with this newly found customer insight.
To succeed and reach your target audience, you’ll have to collect user data and analyze changes in pricing strategy as they happen. One of the best ways is to make sure that you get early access to feedback for changes you make. Pricing is such an important factor in a business. Keep track to see if your prices are hitting the right balance so that you make more money and also keep customers happy. Ensure that it is ‘fair’. You should be able to find subtle changes that can affect your pricing. If things don’t work out, re-evaluate. But don’t be quick to switch and create a new subscriber base from scratch, since you might drive away from current ones.
Example #1: Pinegrow takes Brazil (eventually)
Pinegrow’s website builder software, which they sell in Brazil at the same price as in their home market, was seeing an issue with this.
By adding BRL as a currency and lowering the prices of their products to reflect the local economy, they saw a lot more customers.
The increase in incoming customers indirectly led to an upward trend in Pinegrow’s revenue. The BRL prices that Pinegrow used were about two-thirds lower than their initial USD equivalent. Far from harming their bottom line, they saw an increase of 177% in sales even with that heavy discount.
Maximizing conversion rates is vital in today’s business world. Customers differ vastly across cultures, backgrounds, and ages so knowing your customer and understanding their buying power is of utmost importance.
To start with, there are several things to consider when researching new markets to expand into. Let’s look at some key points:
- currencies used
- Disposable income
- Local pricing of competitors
- Your company’s size in that industry
- General demand for your product
Example #2: Tweakbit do some tweaking
Tweakbit can provide anti-virus software in an increasingly competitive market, but they might not have a lot of brand loyalty because they buy their software to solve a particular problem (most people don’t want viruses). This would set them apart as being very sensitive.
Tweakbit’s pricing is designed to address your needs. Tweakbit offers discounts both upfront and throughout the entire customer journey. These types of perks can alter your user’s perception of the software, helping convince them to pay a premium on what they would have paid without the benefits. In addition to this, they also run regular promo campaigns to make sure the customers’ pricing expectations are met.
The price or billing models you charge to customers should be thought through strategically, and researched so that you get the right model for every customer.
Example #3: Smile Software optimize for upgrades
Smile Software’s PDFPen has been updated with a focus on the user, following their success over the last few years.
Firstly, we contacted our customers via email to offer them a PDFPen promotional code. This means that within the app, a user’s existing license was automatically verified and upgraded to the latest version.
The people who purchased the latest version in January are eligible for a free upgrade. For those who have purchased Smile Software within the past year, they recently introduced a tiered system.
This tiered system was designed to help customers evaluate the additional costs that come with upgrading from basic ($50) or prop ($30). Customers that bought this plan said it helped with understanding “the cost of upgrading from their previous tier.”
Common pricing strategies
Pricing strategies vary and are usually chosen based on what industry you’re in and how your product is priced. They have both pros and cons. Now that you’ve decided on your strategy, you can begin the process of determining the prices.
Below are some price strategies to get you started.
This is a rather aggressive strategy. According to it, the product is sold at low prices on the market. This strategy aims to disrupt the competition by creating lower prices that are pulling customers away.
Blockbuster and Redbox are just examples of this. While Blockbuster was still offering DVDs for as cheap as $5, Redbox was placing their automated rental boxes outside of many stores. You can rent movies from Redbox for $1 a day, or $1 per day for late fees. Blockbuster is long gone, but Redbox is hanging on– until streaming services bring it to its end.
When you are competing with others, to be the best, you must understand the prices of your competitors so that you can reach your goals. You analyzed the pricing approach of your competitors and set the same prices for your products. On the other hand, you can set higher or lower prices than what your competitors are setting.
To ensure that your profit margins are sustainable given your pricing, you need to make your production and overhead as low as possible. Grocery stores often offer lower prices in terms of packaging for their store-brand products to compete with brand-name items.
If you match the competition’s prices, your product will have to be different from those products on offer. Fuel often has the same price, so gas stations must offer something else to attract customers—such as a clean restroom, or cheap car wash coupons.
Increasing your pricing will give you an edge over your competition only if you’re offering more value, higher quality, or additional features. Apple demonstrates this with their iPhone cell phones. They charge a slight premium, but they have features and benefits that make it worth the slightly higher price.
With price skimming, you typically launch your product at a higher price to generate more revenue early on. However, the price “skims” down with time. As the novelty of the product wears off, it becomes less expensive.
This is very true in tech products. When DVD players were new to the market they could cost up to $1000, but with technological innovations, now you can get one for as little as $29.99. The prices of DVD players have steadily dropped over time, as technology has improved and become more affordable.
Companies use this strategy to set their prices based on what customers perceive the value of the product to be. If you price your products based on what customers believe they’re worth, then the more expensive a customer thinks the product is, the higher of a price tag he’ll attach to it.
The fashion industry is heavily influenced by value-based pricing. A designer whose handbags are regularly carried by celebrities will be perceived as having a higher-quality product.
Market-based pricing is more dependent on what the product has to offer compared to other items in the market. You’re pricing your product at or near the prices of your competitors. This is often a characteristic of the market in items like vehicles, raw materials, and other “necessities”.
It’s a shame that not enough companies spend time on pricing. Not optimizing your prices can lead you to problems and missed opportunities, which can in turn bring down your revenue.
It doesn’t matter what you’re selling—SaaS software, groceries, electronics, handbags, or even industrial tools. When you optimize your pricing, it has such a big impact on your business that it’s something you can’t afford to ignore. With the right tools on your end, the process of optimizing your pricing doesn’t have to be difficult.
Price optimization is an element of trade that has been around since the beginning, but we don’t have to do it the way our ancestors did because thanks to technology, it’s much more sophisticated and getting better.
Smart pricing is important to ensure a seller is priced competitively and can offer the best possible price for their products, which customers may alter freely. Price optimization research helps retailers understand how customers react to different pricing strategies to offer the best prices possible.
Thanks to machine learning, businesses have the power to identify key pricing-related variables. These include purchase histories, season, inventory, and competitors’ pricing. They can ensure the best prices and offers which are tailored to your KPIs. Because of this many retailers are embracing machine learning as part of their analysis and price optimization.
Price Optimization Process
The process of price optimization starts with price monitoring. To make informed pricing decisions, you need to track competitors’ data – prices, discounts, promotions, etc. Consolidation of such a massive amount of data used to be a complex but achievable task. With markets witnessing an exponential increase in the amount of information, however, manual price monitoring is increasingly complex and ineffective. AI-powered solutions alleviate the burden of big data, providing retailers with large amounts of high-quality data delivered in a timely manner, saving time and money in the process.
Some external price tracking providers are taking their software a step further, and offer price recommendations directly from the external pricing tool itself, centralizing the price optimization process into an all-in-one solution. Despite how simple it may sound, these advanced price optimization solutions are still highly customizable and suitable for businesses of all sizes. In other words, they may be an all-in-one solution, but they are far from a “one size fits all” solution.
Pricing optimization software It Is About the User
When one thinks of software, the first thing that comes to mind is the word, “priced.” Pricing software is important in today’s world. The fact is that the software you purchase has value as well as a price tag. If you are not careful, you can find yourself in a situation where the software you purchase has become outdated and not useful for your pricing teams so it would hardly help with smart pricing decisions.
You need to think about a couple of things when it comes to software pricing. You need to think about how much you will use. How much will it cost to pay for this software each month? Will you be keeping some or all of this software? What is the projected use of this software? When you consider these things, you can come up with a fair amount of money to spend on this software. Keep in mind that the longer you have the software, the more you will be paying for it.
When you have a lot of stored information, this can cost you a lot of hard drive space. This is especially true if you store all of your e-mail messages on your computer. If you have this many documents on your computer, you are paying for storage that you could just as easily have saved on a CD. If you are storing all of your information on your computer, you should think about backing up all of your information. You do not want to lose any of your data. The last thing you want is to be in a situation where you need to go out and purchase software that will get you in trouble because you can no longer find it.
Choosing the Right Price Optimization Software
The amount of price optimization tools on the market is increasing, and it’s both good and bad news. The competition encourages innovation but also makes choosing the right pricing optimization software for your company’s needs more complicated. That being said, there are a few key things to look out for when searching for the right price optimization software.
First of all, it’s necessary to make sure that information collected by the price monitoring software is of the best quality. When looking at the data collected by the dynamic pricing software in question, pay special attention to the following factors:
- accuracy rate
- depth of comparisons
- number of product page scans
- depth of matches
Another issue worth considering is that some providers deliver pricing data at specific times of the day, which may be inconvenient when setting up your own scanning schedule. Additionally, this could mean that you receive data at the same time as your competitors, which may take away the competitive edge that this data could potentially give you. It is better to choose a dynamic pricing software that enables you to set up your own scanning schedule, so you can have data delivered to you when your business needs it most.
To ensure efficient utilization of the software, it is a good idea to take a look at the interface which should be user-unfriendly and practical for data processing. The software should be easy to use and transparent, providing deviation alerts so you can respond to market volatility as quickly as possible with timely data-driven decisions.
The provider must be capable to ensure competitive and matching data of a certain quality, stated in a Service Level Agreement. Furthermore, the price optimization software should provide you with MAP violation alerts so you can protect your brand image efficiently.
Lastly, you should consider what exactly the software is monitoring. There are a few basic things that a good price optimization software should monitor:
- Company positioning on the market. Are you within the market pricing range? Which competitors are affecting your sales?
- Your competitors’ promotion activities. Does the software track promotions, allowing you to optimize your own?
- Product availability. Are you alerted when rival companies are out of stock of a certain product?
With this ground covered, pricing optimization becomes clear-cut, fast, efficient, and easy to understand.
Now on the market, there are many programs for optimizing pricing in the field of retail. Developers are constantly improving the platform, complementing them with new features and capabilities. To choose the best solution for your company, We recommend that you consider the following criteria:
- Compliance with business goals: choose price optimization software with functionality that easily adapts to the specifics of your business segment. Also, pay attention to the settings. The ability to independently regulate the data processing process will allow you to receive information earlier than competitors.
- The ability to integrate with other software: if you are already using programs for business automation, for example, CRM, choose a platform with the ability to connect to it. Thus, you can improve the processing of
- The customer base, predicts the demand for a certain range of products.
- Functionality: choose a program that provides offline access from other devices. For example, there is a pricing tool software with developed mobile applications. This is very convenient because it allows you to offer customers products at current competitive prices at any given time.
- Usability level: choose a program with an understandable interface so that company employees can take full advantage of the system’s functionality.
The Profit Potential with Price Opimization Software
Retailers are finally starting to recognize price optimization for its profit potential. Dynamic pricing tools allow them to set the right prices based on solid data, increasing revenue as a result. Recent reports show that many major retailers were able to increase their profits by the merit of improved inventory management without major markdowns.
Price optimization helps to improve inventory management, reduce markdowns and gain higher gross margins. Having the right software supporting your price optimization process is the secret to selling products at optimal sales levels and maximizing profit. Regardless of the price optimization model your company uses to determine prices, AI-powered pricing tools can provide your company with improved results.
Price optimization software: what are the best products?
First of all, programs differ in functionality which directly affects the cost of this system. Also, pricing tool software is distinguished by its intended purpose, for example, some platforms are focused only on small, medium-sized businesses, or large enterprises.
The integration method, the availability of a mobile version, the action of online support are the key parameters that affect the functionality of a pricing tool software. Some companies offer customers a free trial version of the dynamic pricing program for a certain period.