Computers and artificial intelligence have come along at an exponential rate over the past few decades, from being regarded as oversized adding machines to the point where they have played integral roles in some legitimately creative endeavours.
Knowing your customers is important for any retail business. But knowing what your competitors are up is also critical, especially when it comes to pricing.
For 12-year-old online retailer Everten, competing successful in its core kitchenware market is tightly bound to its knowledge of competitor pricing. The Internet era has given consumers near-perfect knowledge of market pricing, and the knowledge that a better deal may be only a click away.
“Kitchenware online is very competitive, and very price sensitive,” says Everten’s marketing director, David Kahn. “It is now just a simple click of a tab [for consumers] to get a price comparison, and with Google Shopping you can see exactly what the prices are in front of you.”
Traditionally Everten differentiated itself on customer service, particularly in the category of chefs’ knives, where it stocks a large range of high-end products and has a strong patronage amongst restaurants and executive chefs.
“Being an online store, you lose that face-to-face with customers, and we really try to go the extra mile by helping our customers and giving our customers good advice when they call. We have very knowledgeable customer service team,” he says.
But ultimately, no customer wants to spend money they don’t have to. Kahn says an early attempt to automate pricing intelligence via an extension to Everten’s Magento ecommerce platform proved detrimental to site performance. The company resorted to using techniques such as monitoring competitor promotions, and often would be alerted to price movements by customers who called up to price match.
Realising the inefficiency of these methods, Kahn signed up to trial a new service from Invigor Group called SpotLite, which scours the Web for all prices offered against nominated SKUs.
“Having SpotLite really helps us in terms of monitoring what our competitors are selling at, and saves the hack work in monitoring the weekly newsletters and promotions,” Kahn says.
“It is a lot more convenient, with the notifications being there in real time, and saving us a loss of sales from customers shopping elsewhere because we haven’t changed our pricing quickly enough. And it also gives us an understanding of our competitor’s strategies and tactics. We are starting to notice patterns in their behaviour – when they are choosing to go on sale and when they are changing their pricing, and what time of the week they are doing it.”
Kahn says SpotLite has also helped the company improve margins in categories where it was pricing significantly under the market, and has returned a large chunk of time to him and his colleagues.
“It has helped us with the productivity and efficiency in being able to change our prices,” he says. “It saves us the time in researching for ourselves and having to be on top of when promotions come out. It reduces manual errors as well, and gives us a holistic view of the market.”
Invigor Group is an information and digital services company with strong specialisation in retail. Chairman and CEO, Gary Cohen, says the company has a lengthy heritage in providing pricing intelligence for some of Australia’s largest retailers.
“We have deep technology we are using for sophisticated corporates,” Cohen says. “What we are now doing is making that same technology available to everybody, but they have to do a fair bit of the work in terms of specifying what they are following.
“Once you specify those products, you’ll get a report daily, or as frequently as you want, either by email or dashboard, and it will tell you all the price movements.”
Cohen says Invigor Group has invested heavily in developing technology that mimics human activity online and allows it to bypass the barriers many sites put in place to prevent software bots harvesting price information.
“We have built solutions that emulate the behaviour of individuals, which makes it virtually impossible for corporates to stop us,” Cohen says.
The company is now developing tools to assist with the analysis of historical pricing patterns, and is also investing in predictive analytics tools based on its data sets.