Managing pricing used to be coordinated by, as we called it, black-box algorithms. Meaning, a system without any knowledge of its internal calculation.
Nowadays, the computer power available, gave new possibilities of understanding and capabilities.
Black box – The old norm
We used to have the mean to correct entry data, but unfortunately, no visibility on the optimization tool calculations. The outcome of this process was a ´Magic´ number, with no transparency between entry data and exit data.
In the 2000s, we started to have more visibility on the different calculation elements, such as price elasticity and seasonality. Every selling point was considered the same, today we can group them by sub-category having a similar customer typology to target them better.
Optimization tools used to be piloted by experts without having a complete understanding of the process. Ignoring collateral effects negatively impacted their confidence level in result accuracy.
They used to work in silos to take decisions and understand the results. Unfortunately, they didn’t have the means to measure all consequences of pricing actions on the market. So, it resulted in a big gap between the forecast and the actual outcome.
Today, the computer power available at one´s disposal allows us more visibility and speed!
Dynamic pricing to foresee and avoid unexpected surprises in your pricing
How to optimize your pricing potential?
Dynamic pricing plays a critical part in supporting both consumer price perception and retailer profitability.
Let´s take a look at the must-haves of a price optimization tool!
1 – Needful modules.
Commonly speaking, a robust dynamic-pricing solution should consist of a set of modules, each operating in parallel to produce price recommendations for every SKU in the assortment.
- Initial Set- up
- Regular pricing
- Elasticity, Seasonality, cannibalization effect
- Price perception and willingness to pay
- Competitor module – Price adjustment based on competitor prices in real-time
- Omnichannel – offline/online price management
2 – A tailored solution
Fully customized to your market’s specificities and customer typologies as well as your strategic objectives (Market positioning)
Daily iterations that help you to adapt to new market trends.
3 – Intuitive
4 – Easily integrated into existing systems
5 – Precisely delivering your pricing strategy into the market
The tool is there to support you and will always do what you ask of it. It will allow you to use predictability and measurement on the achievement of your objectives.
Take control of your Pricing with Yieldigo
Envisioning to change your prices once or multiple times a day, even online? Yieldigo is here for you.
- Visibility on calculations (Elasticity, Seasonality, Cannibalization)
- Instant KPI´s prediction
- Tailored fully customized tool
- Fully automated
- Visual approach
- What-if simulations
Instantly compare enterprise-wide pricing strategies by their impact on your P&L at article, store, or chain scale.
- Bulk Pricing
- Promo module – Decision support module taking into account cannibalization effects.
Yieldigo is an evolutive tool continually evolving, listening to our client needs.