Dynamic pricing is not focused on the lowest price, but on the best price. As a partner of Profitero, predictive analytics specialist Blue Yonder uses its software to help commercial enterprises attain their strategic goals, such as higher sales volumes and lower inventories. Because Profitero's competitor prices are now integrated in the solution, mass pricing decisions are now even better.
If the sales volumes in an online shop are low despite many people visiting it, the prices in general are not right. Few online sellers today are able to recognize this by just looking at the sales figures and then adapting the list price of items. In brick and mortar retail, the prices increasingly change. Dynamic pricing has become a crucial instrument for attaining sales and revenue goals. A unified and complete pricing strategy is based on prices being optimized over the entire product line, taking into account all relevant factors. Enterprises need to first define the goal of price optimization. Is the goal to increase the sales volume or the gross revenue on the merchandise? Or does selling inventory make more sense? Blue Yonder’s Predictive Analytics software can be flexibly adapted to goals that change with time. The software exactly measures price elasticities in a statistical manner and in such a way that the forecasted best prices really do have the desired effect. OTTO, this year's German Innovation Prize winner, used the Blue Yonder solution in a pilot project. The solution provided the optimal price at each moment in the product lifecycle. Because of this, OTTO increased its sales and revenue and improved its overall results. Control options for specialized users were expanded Blue Yonder is meeting the needs created by the increasing importance of real-time price adjustments by permanently adapting its software, and continually refines the algorithm. In order to further refine mass automated pricing decisions, the data scientists at Blue Yonder integrated the ongoing and current measurements of price elasticities into the solution. They also enhanced the control capabilities for the users and the reporting. The effect of differing prices can thus be simulated on various key figures. The category leader can freely configure rules such as pricing scales and pricing corridors for brand name articles. Enterprises that use the solution value the time they save and they attain very solid results: A boost in sales and revenue as well as many new customers is the rule. By integrating competitor prices that are determined by Profitero, the forecast quality for brand name articles and comparable articles is further improved. The data also strengthen Blue Yonder's demand planning software. Profitero and Blue Yonder together offer commercial trading and retail companies the ability to optimally position themselves in the market by using automated mass decisions. The companies should take advantage of this opportunity, because, in the near future, category managers and materials planners will have a hard time doing their jobs without big data analytics. They will also have a hard time without big data analytics, when it comes to making the right decisions in ever changing competitive environments, and with demanding customers who are very well informed.