Ten years ago, a friend of mine who was the CIO of a supermarket chain at the time left to join a company that sells price optimization software. As I learned more about the company and its technological capabilities, I became fascinated with the concept (e.g. "If we lower the price of this brand of yogurt by X, how will this affect the sale of fresh berries?"). I recently had an opportunity to speak with an e-commerce executive about her company's use of advanced pricing intelligence software. Our discussion reflects how this type of software has evolved since its early days.ReStockIt.com is an online retailer that provides restaurant, janitorial, and office supplies and equipment. Up until a few years ago, company officials used homegrown software to scrape its competitors' websites to determine how they were setting prices on competing products such as cleaning supplies. Problem was, ReStockIt was limited by the number of competitors it could evaluate at any given time. Plus, because product prices fluctuate, the data it was analyzing often wasn't fresh.
In late 2012, ReStockIt learned about MarketYze, a company that provides online price comparison software as a service (SaaS). ReStockIt began using the service in early 2013. The MarketYze system gathers information about many of the 200,000 products that ReStockIt carries that are also sold by competitors, including companies on Amazon.com's AWS Marketplace. ReStockIt then uses that pricing information with its own pricing algorithm to help it determine how to set product pricing, says Susan Palazzese, executive vice president of ecommerce marketing & operations at ReStockIt.
The use of MarketYze has provided ReStockIt with several benefits. Prior to using the service, ReStockIt was able to glean accurate competitive information about less than one-quarter of the merchandise it sells. With MarketYze, ReStockIt can now track prices on 65-to-70 percent of the products it carries. This includes data from Amazon Marketplace competitors it wasn't able to previously monitor, says Palazzese. This has helped provide ReStockIt with timely and accurate pricing information that has helped it to improve its profit margins.
"Amazon is often the first place people go to shop," says Palazzese. "So it's important to know what competitors are selling at there. For us, the biggest benefit is visibility to information," she adds.