By Sunil Mirani, CEO, Ugam
The new paradigm of information transparency and the rise of the empowered consumer brings new challenges and opportunities for brands and retailers to create consumer experiences that support effective conversion – be it in-store or on-line. In reality, it’s no longer about physical stores or online, as online is increasingly getting defined as “stores plus,” meaning everything carried in physical stores plus more.
Retailers are constantly seeking to find out what are consumers looking for – what is hot, how much are they likely to pay, how they’re likely to search for or find products. As the volume and velocity of data continues to increase, it becomes more and more important for retailers to sift through massive amounts of data for valuable insights. The rise of Big Data and disruptive technology is now enabling successful retailers to monitor, mine and analyze consumer sentiment to make informed decisions about everything from pricing to assortment and product descriptions. This data is increasingly including signals from social sites like Facebook, Google and Pinterest to decide how to best price and present retail products.
One way of competing on price is by not competing on price, but instead by having differentiated assortment that consumers really want. Take the case of a leading retailer that leveraged assortment intelligence using data from competitor’s websites, social signals like Facebook, consumer product reviews and Google traffic to understand assortment gaps, competitor pricing and promotions, whether or not they needed to develop products, and whether or not they were pricing products competitively.
Thanks to availability of data and new techniques, they were able to systematically and objectively uncover assortment intelligence based on product design (contemporary, classic) and finish (espresso, distressed) and a whole host of variables that was not possible to uncover before. They were able to do it across a whole host of branded and private-label categories in a timely manner.
By leveraging big data and technology, another retailer was able to determine specific product SKUs for which price was the primary dimension of competition. They were not keen on matching the price of the lowest retailer, and instead uncovered meaningful insights from consumer signals, worked with their vendors to add product variants, figured out what product bundles would be more effective, and also made changes to the way the product was merchandised on the site as a way to compete on other dimensions.
In a world increasingly driven by timely data, in which consumers can make purchasing decisions at the click of a button, online price optimization has become critical. Because of this, it’s become critical for retailers to have real-time data in order to make timely pricing decisions that make an impact on their business. If price data isn’t current, consumers may perceive that certain retailers aren’t competitive, which can be especially damaging on high-volume traffic days like Black Friday.
Retail category managers need on-demand access to real-time data supported by simple, intuitive tools that compare and adjust prices, and make intelligent recommendations. Price monitoring and matching alone is no longer enough to remain competitive, and retailers are increasingly turning to technology that provides them with smart diagnostic insights and recommendations that lead to impactful actions.
True on-demand, real-time data is no easy task. Pulling pricing data and consumer signals about millions of products within seconds is definitely a challenge, but this is the information that retailers need to know to remain competitive. They need to be able to see what’s happening from both a competitor and consumer standpoint in real-time and leverage historic data to take action that can positively impact their business.
As we look ahead into second half of 2014 and beyond, we will continue to see blending of product data from multiple sources, the use of disruptive technology and the rise of real-time data all helping retailers understand their competitors and consumers better and enabling them to make impactful decisions to stay ahead of the game. In fact, leveraging current advances in pricing, assortment and social sentiment intelligence techniques available today will help retailers make informed decisions to increase their top and bottom lines and redefine the game rather than just pushing harder in the existing one.