Price Points by Omnia Retail

Dynamic pricing is a tool, yes, and while it's an insanely smart tool, it can only work with the information it's given. What you put into a dynamic pricing solution as input matters and makes a huge impact on the price...

Dynamic pricing is a tool, yes, and while it's an insanely smart tool, it can only work with the information it's given. What you put into a dynamic pricing solution as input matters and makes a huge impact on the price advices it creates. If you have bad competitor data that isn't up-to-date, for example, then the tool will generate equally bad price advices. [00:00:10] - Grace Hello and welcome to Price Points, the podcast that examines the changing world of e-commerce one episode at a time. I'm your host Grace Baldwin. And today we're talking about data quality. So this is a theme we're going to explore this whole month because it's super important. Dynamic pricing is a tool yes, and while it's an insanely smart tool, it can only work with the information that it's given. What you put into a dynamic pricing solution as input matters and makes a huge impact on the price advices it creates. If you have bad competitor data that isn't up to date for example, then the tool will generate equally bad price advices so in the coming weeks, we'll see a lot of content from us about this. But today I sat down with Jasper Wiercx, one of our Solution Consultants here, to talk about data and why it's important. You've already met Jasper in previous episodes and I'll include links to some of his other interviews in the show notes. In this episode though , you'll learn about what kind of data we need, how the dynamic pricing tool actually collects that data, what a data quality assurance process looks like, why data seems to be so expensive and more. So I'm just going to keep this in short and let's just go ahead and jump right into it. Please enjoy this interview with Jasper Wiercx. Well, so thank you again for joining me. I wanted to start a little bit talking just about data quality in general. And so, data has become more important in every industry. And so why is data important in pricing and what kind of data is important? [00:01:41] - Jasper Yeah. So I think in general like you said as a company in general or an organization in general, I think you can definitely see a trend into the digital adoption. And if you want to have some way to perform in [00:02:00] a digital space, you need to have data available to position yourself, but also to make certain it's to gain insights out of the data and become more of an insights-driven organization. So as a retailer or as a brand moving into Dynamic pricing, of course, you'll be very dependent on the data that you use to base your decisions on. In that regard the quality of the data is very important, of course because you make automated decisions and at least I would be only would be confident about those decisions if I'm a hundred percent confident that the data on the line those decisions is actually accurate [00:02:48] - Grace The data that we're talking about is pricing data from both competitors and then comparison shopping engines, correct. [00:02:55] - Jasper In terms of external data. Yes. So about the comparative data or retailer data in that respect is primarily pricing data, but you can also argue that your internal data should be accurate so. Do you want to have includes more advanced Dynamic pricing strategies like stock-based you need to be sure that those data elements as your stock units sold for instance are also accurate because otherwise you will still make wrong decisions based on flawed internal data. But what if you sell your own products or have products that can't be matched, can't be compared in a one to one comparison. Then what can you do? You need different data points to steer on, to base your price on, and one of those is reference pricing. So what you do is basically for a product that's hard to compare, you make it comparable. You refer the price of one product to the price of another product that's not directly comparable. In short that's reference pricing it's used a lot in private label products for instance but can also be used in matchable products or unmatched products, but for private label it's it's a very good one because it also places you in terms of value in a relative distance towards known products. Let's say I'm making my own TV. I know, yeah quality is about 20 percent difference or 20 percent less then I'd like my price also to be 20 percent less than a famous Samsung TV for instance. So I'd refer both in quality and in price towards other other products and thereby making it comparable. [00:02:48] - Grace The data that we're talking about is pricing data from both competitors and then comparison shopping engines, correct [00:02:55] - Jasper In terms of external data. Yes. So about the comparative data or retailer data in that respect is primarily pricing data, but you can also argue that your internal data should be accurate so. Do you want to have includes more advanced Dynamic pricing strategies like stock-based you need to be sure that those data elements as your stock units sold for instance are also accurate because otherwise you will still make wrong decisions based on flawed internal data. [00:03:30] - Grace Yeah, and as they say garbage in garbage out, correct. [00:03:32] - Jasper Yeah. No exactly. Yes. That's the typical way to put it. Yeah. [00:03:37] - Grace So the crawler is separate from the dynamic pricing tool the crawler collects the data. Yeah, then whatever Dynamic pricing company you work with will check the data and then feed that data into the dynamic pricing tool, correct? That's the flow of logic. [00:03:50] - Jasper Yeah. So, yeah, actually you should see the exactly as separate. It's the fact that you have a dynamic pricing so far which automates certain decision-making on data, basically. However, the data needs to come from somewhere internal data is of course obvious. You will provide it to the software. However, the external data or a competitor and pricing data that something at the crawler looks for and makes available to that software to make decisions on. Scraping information online is just a very popular thing to have but that also makes it very difficult [00:04:27] - Grace Popular in what sense so popular for other dynamic. [00:04:30] - Jasper In the high in demand, I have to say. And it makes sense because it gives you a clear insight in how a competitor or a comparison shopping site in that case is actually offering the same type of products as you are offering. So if you can get insights in though that information so how does a product get positioned online but also at what price does it get offered that will give you Insight in how a competitor is actually operating the also means that a lot of competitors they take action to make it more difficult to scrape that the information which makes scraping and crawling websites difficult thing to do. [00:05:15] - Grace So what sort of actions do they take to prevent you from gathering that data? [00:05:19] - Jasper Yeah. So that's a good question. If if you are a crawler you often use an IP address to log into a website and if that website detects you entering that's websites too frequently from a single IP address, it will notice that and it will block that IP address. So as a crawler, you probably have multiple IP addresses or multiple servers with that via which routes your crawler can actually go to the website in order to get that information. And those got this is an example of some kind of constraints or some kind of [00:06:00] barrier. That's the this gets competitive retailers take in order to limit access to the information. So as I know is for instance Amazon as a good example is one of the most difficult players to actually scrape because yeah, they don't want to get that information widely available for everyone. So if for any reason a competitor or for instance Google Shopping as we've seen a few weeks ago actually changes the layout of its web page, that will also impact your crawler and that's what of course impact the data quality for scraping in general. You're always dependent on what is displayed on the on the website. Yeah, and as you also mentioned, we are we either of comparison shopping sites or we directly straight from the website. Google Shopping, for instance, does not display the stock levels from the retailer, so we cannot all we cannot give you information on the stock level if you have Google Shopping as a source. If you directly scrape, we can include of course the stock levels as we will scrape that. [00:07:41] - Grace So that's a good transition that into talking about dependencies. So. Why is it important than to have data from multiple places for that is that's a good example, I guess, right. [00:07:52] - Jasper So this first of all it's an indeed about what type of information is readily available on the source like we discussed with stock levels. Secondly, it's also as we just also briefly talked about is the fact that the web page is websites are constantly changing. So there by if you only have one data source, you will always be at risk of changes in the data source, if you combine multiple data sources you mitigate your exposure to the risk of someone else changing their their their layouts for instance so [00:08:34] - Grace So is then one of those examples so we're talking talking about GTIN versus URL. So we use both of them and that's a way to reduce that dependency on a URL breaking. [00:08:46] - Jasper Yeah so, not necessarily URL breaking. So we always look for the ID so the GTIN for instance or the EAN codes on a URL, okay. If the URL changes, then we of course need to inform the crawler or update the crawler on the fact that that URL actually changes. So as an example, let's take let's take Amazon and Amazon for whatever reason changes its URL our, crawler cannot find that URL any longer. So therefore it cannot find that set of GTINs to be scraped from Amazon. If you know also have a Google Shopping as a data source where Amazon actively promotes or sells products, you will still find that set of cheating products on Google shopping. Assuming that that's that's Amazon selling that via Google Shopping. [00:09:46] - Grace And so will that price on Google Shopping always be the same price that's on the website then. [00:09:51] - Jasper Yes. Yeah, yes it because school shopping requires effect that your the price that they offered a product for via Google Shopping is accurate [00:10:01] - Grace Okay. Yeah, and so if for example Amazon isn't selling on Google Shopping or isn't promoting on Google Shopping, is there a way for us to detect whether the website has changed or URL is not working?Are there any categories that this is especially useful for? And are there categories where it's not useful? [00:10:13] - Jasper Yeah. So so of course, we have a large client base all tapping into different data sources. So if anything happens with one of those data sources, we know it quite fast. And we inform our other clients who were not aware of the change and how it might impact our data quality and data accuracy. Also, we have other mitigations in place where we actually store accurate information for extended periods in order to mitigate these type of risks because we are also dependent on that. But thankfully we're working with a few very professional partners that notify us more in advance that we are very happy with in terms of data quality and we are completely [00:11:00] confident that they will do their utmost best to change their crawler as fast as possible and again update that pricing quality. We make the selection quite carefully before which partners we are working with both in terms of their professional. But also in terms if they if the data is actually accurate and it's a good that it's a good quality of data because there's a lot of scrapers out there offering rubbish data. It makes sense isn't it data is important for organizations so people are trying to monetize on that and then trying to sell the data. In that regard. you see the value of data actually going up and therefore all often also the price and those enterpreneurs or trying to take of course advantage of that by selling the same data or perceived same data the lower price. But there's also reasons why of course a price of data is at a certain level [00:12:00] is because the quality needs to be the best and therefore we decide to work only with selected select the scrapers of course and more importantly is that we as only are we offer a One-Stop shop of different data sources of those premium scrapers. If you for instance develop your own dynamic pricing solution, you would actually have to procure the data from those individual scrapers and then again combine it in your own system. And we can actually easily tell you which data source is actually the best for your specific situation. So that means determining which data source has the best match rates on your competitors in a certain market, but also to only select certain [00:13:00] top seller products of your own. And directly scrape different sources from your from the your most important retailers to ensure that you have the best coverage of the data Yeah. [00:13:14] - Grace So is there like sort of a rigorous test that that a partner goes through before they become one of our partners? [00:13:20] - Jasper Yeah. No, absolutely. So both in terms of the process both in terms of customer service, of course, and also in terms of just the quality itself to we personally check very very well before actually selling it or offering to our to our own clients [00:13:37] - Grace Okay. Yeah, and so if someone you know is dead set on building their own, are there any quality checks or what would advice would you give to someone who wants to actually procure their own data and work with data sources on their own? How can you avoid the ones that are selling you snake oil? Or is it really hard to tell? [00:13:59] - Jasper Yeah, I would talk to a lot of different layers, of course and just do a very solid data check on it before you make any decisions. I've seen from multiple clients that they already had a certain certain provider in place, but that the data that we provide was actually more accurate. And for some reason all the active users is already knew that the data was pouring some sense and it also it also makes it difficult to completely trust the system itself, but how to check how to do that. Yeah, there are multiple ways to do it. And if you want more information, I think you just we can do a check for you if you are curious and see if it [00:14:47] - Grace Yeah. Yeah get in touch [00:14:48] - Jasper Exactly [00:14:49] - Grace Actually talk to somebody who knows the different data sources available [00:14:54] - Jasper Nowadays, I think as a retailer or as a brand you want to sell your products, [00:15:00] that's what you're good at. Do you want to position yourself correctly in marketing? There's no reason to spend a lot of time in these type of nitty-gritty details, but very important details, without really knowing what to what to look for. Yeah. Yeah, exactly for all the. Let's say just a few dollars in the penny in on the monthly monthly cost. If you would compare that to the actual time effort you would need to spend in it. You could very much argue that your time is way worth to spend on something else. [00:15:35] - Grace Yeah, because I mean we have a full team here doing quality checks and everything. Yeah, exactly. So an organization or a company that wants to really do this themselves would need to hire a ton of people to do this yeah, and then take a lot way a lot of resources from their Core Business correctly. [00:15:50] - Jasper And value based pricing starts off then with mapping out your assortment based on some characteristics. [00:15:52] - Grace cool. All right. [00:15:53] - Jasper Just one more thing. I think it's good to mention. So. [00:16:00] We offer the data ourselves because we feel like it's important to offer that as this the only way that you can use our system or dynamic pricing system in the case, but we also offer the solution that you can give us your data and we plug it into our system. If you really want to. [00:16:19] - Grace So why would someone want to do that? Oh, so you mean so someone like a company can come in and say hey we are we're using this data source. We'd like to install it into a dynamic pricing solution. Can we do that? [00:16:31] - Jasper Yeah. So let's say if you already have a data provider and you might be dependent on a certain contract term that you have when you don't want to double up on cost and I can completely understand that. And then you can we can use that data plug it into our system and then you can still use dynamic pricing. Simply for the reason that we feel like if you really want to we want to give you that flexibility and if you really think that's going to make your business successful we're willing to support that. Of course, we are going to challenge you on the data accuracy simply for the reason that you will not experience a good dynamic pricing solution or our tool be very much dependent on the data that you give up to us. [00:17:18] - Grace If a company is coming in and they already have a data provider can they use that and then also enrich it with data that we have [00:17:24] - Jasper Absolutely. [00:17:26] - Grace You can get like a quadruple whammy there? Yeah, actually from a ton of different data providers. Yeah, which sounds like the kind of the best of both worlds if you're in a contractual a contractual situation. [00:17:37] - Jasper For instance or simply because you just want to look into whether how dynamic pricing would look but to be to be fair, we've also seen in the past that the actual results of dynamic pricing was quite was quite bad because the data underlying was just bad. [00:17:57] - Grace Yeah. Yeah makes sense Perfect. All right, well. Perfect. Alright. Well, thank you so much. This has been really helpful. It's definitely upended a couple of notes I had but for that's for the better. If people want to get in touch with you how just by email and then also LinkedIn is okay. [00:18:15] - Jasper Yeah, so LinkedIn is okay and my email is Jasper at Omnia Retail.com or reach out to via the website. [00:18:22] - Grace All right, perfect, and I will include all of that in the show notes. Yeah, thank you. [00:18:26] - Jasper Thank you so much [00:18:31] - Grace Thanks for listening to price points. I hope you found this episode insightful and learned more about data than you expected. If you'd like to chat further about data. You can reach out directly to Jasper at Jasper at Omnia retail.com. That's J-A-S-P-E-R at Omnia retail.com or via LinkedIn. If you'd like to chat with me, you can also catch me via the same channels. In the meantime, though I hope you have an awesome rest of your day. SHOW NOTES: Omnia was founded in 2015 with one goal in mind: to help retailers take care of their assortments and grow profitably with technology. Today, our full suite of automation tools help retailers save time on tedious work, take control of retail their assortment, and build more profitable pricing and marketing strategies. Omnia serves more than 100 leading retailers, including Decathlon, Tennis Point, Bol.com, Wehkamp, de Bijenkorf, and Feelunique. For her clients, Omnia scans and analyzes more than 500 million price points and makes more than 7 million price adjustments daily. Website • LinkedIn Music: "Little Wolf" courtesy of Wistia TO CONTACT HIDDE ROELOFFS VALK: Email: hidde@omniaretail.com LinkedIn: Visit here TO CONTACT GRACE BALDWIN: Email: grace@omniaretail.com LinkedIn: Visit here

Thinking of building your own dynamic pricing solution in-house? Product Manager Berend van Niekerk tells you everything you need to know for your solution to be a success. [00:00:10.180] - Grace Hello and welcome to...

Thinking of building your own dynamic pricing solution in-house? Product Manager Berend van Niekerk tells you everything you need to know for your solution to be a success. [00:00:10.180] - Grace Hello and welcome to price point the podcast presented by Omnia Retail. I'm your host Grace Baldwin. And today we're talking about what it takes to build your own dynamic pricing solution. Something we hear a lot especially from larger companies is that they want to build their own dynamic pricing solution in-house. And the reasons why are understandable. You want to keep your data as centralized as possible. And if you want to build your own solution that's totally fine. But you should prepare yourself for success what goes into dynamic pricing solution from a technical perspective and what sort of manpower do you need. I ask these questions and many more to Berend van Niekerk our product manager here. Berend is hard to describe. He's quite a character. He's absolutely brilliant. But his mind moves faster than his mouth sometimes. And what's funny is that he's the first to admit this. He has a master's degree in industrial engineering and management science from and Dutch speakers you'll have to excuse me here the University of Groningen. And he has been with Omnia from the start. Today as Product Manager he is responsible for the algorithms and the functional development of the software gathering all the e-commerce and software knowledge within the company, combining this with the wishes of our leading e-commerce customers, and translating this into a tool that helps customers automate their marketing and pricing strategies. Berend took the time to explain to me what actually goes into making a dynamic pricing solution powerful and gives you some practical tips on building a solution that works for your company. So if you're considering building a solution for yourself you're going to enjoy this one. So please help me welcome Berend van Niekerk. So let's get started. Thank you for sitting down with me. Berend can you tell me a little bit more about yourself and what you do here at Omnia. How long have you been here. [00:01:59.650] - Berend Sure. Yeah my name is Berend van Niekerk. I started only almost six years ago so almost from the start. I've been involved in a whole growth path. We we went through the beginning we were just a small company providing data insights in pricing a bit of pricing automation and evolved over times into the full company where we work for bigger enterprises now actually serving a full suite of both pricing and marketing has been very excited. At the beginning I was involved in everything from customer service to consulting to sales and a bit of further management of course. But nowadays I am responsible for these functional developments at Omnia, so meaning what does the system do in actually translating our own customer needs to a roadmap and do that together with our Chief Architect as I'm responsible for what it can do and he is responsible and how it's actually done. It's very exciting and a lot of developments going on an exciting future. [00:03:00.560] - Grace So your actually wrote Product Manager is your actual title. And so you're just really responsible for setting the roadmap figuring out where we're gonna go and then Nathan who's the Chief Architect is more responsible for how we're actually going to do that right? [00:03:16.540] - Berend Yeah yeah basically he's responsible for the execution so that the code around it the database is not responsible what the system does. So do you need to calculate a sort of thing. Do I need to have an interface around it. How does it need to look. What does it need to do. What kind of business rules are in the system and how can we improve that our customers can do to work easier and make their everyday lives that company happier. [00:03:40.720] - Grace Yeah makes sense. And so today we want to talk about building versus buying because that's something that we see a lot in the in the market is that some people say you know we're working on building our own solution we don't really necessarily want to buy dynamic pricing software when we can do it in-house. And so I wanted to explore that a little bit with you and talk about what are the pros and cons of both building a solution but also buying one. So maybe it's a good place to start to talk about what actually goes into a dynamic pricing solution. And like how that how you can materialize that by yourself or with a company. [00:04:19.510] - Berend Yeah I think it's a it's a very important part of the onboarding and this is of course not only the alignment between the business and I.T. but also within the business there is various departments that need to be aligned on what you're trying to achieve with your dynamic pricing. So I think at the beginning customers think that's OK I need to have a data set so I need to know what the competitive pricing and market are. Then I need some basic pricing rules which is built by a BI guy or by a guy from IT and I don't need to upload it to my system. And then I got a full dynamic pricing system. Um in reality and those three parts so the data, the pricing logic, and actually the automation around it to make that a success, there's way more around it. And to make it fully adopted by a company and I think that tradeoff is often not made at the beginning but companies start to realize that once they go into adoption they think OK to make this a success, it's not as simple. So I need to build certain systems around it. I need to have the knowledge in-house. I need to further develop it. I need to maintain it. And what you often see happening is once they try it out and they come back to us again because we've got a full suite solution. [00:05:35.650] - Grace Can we talk a little bit so like what sort of systems do you actually need. [00:05:38.740] - Berend It all starts with the data actually. So you need to have a full overview of the markets and up to date overview to make great decisions. That sounds easier than it is. So what you need to do you need to have connections with multiple data suppliers to provide you the full overview of who is selling what against what price with what delivery times and means you get it at continuously and actually update that multiple times in day. So that's more to market side. You need to understand what is happening who's selling for what. And the other side of the data you need to update is your own data. You need to know OK what are my exact marginal costs. So it was my purchase price. What are my delivery costs. The logistical costs what are my marketing costs to sell a product and you need to have all the product information around it. So what are certain categories. What is my lifecycle over product all that information need to get out. They need to store somewhere and update continuously [00:06:37.540] - Grace Does that information change a lot? That internal information? [00:06:39.580] - Berend Yeah both so internal information categories for example of a product don't change as much but the purchase price costs around it, they are often renegotiated and we need to feed it towards us and also to the stock levels for example and stock levels not just how much you are gonna stock but what you often see at our customers is that they got different warehouses and different warehouses with different stock levels and those different warehouses mean that their delivery time is different and based upon that. It means also that you get longer delivery times you're less competitive versus your competitors so you probably need to make another tradeoff. So actually that continues. That always updates you need to actually update at least once a day but preferably multiple times a day. You need to get to fresh information to make the right choices at that time. [00:07:30.230] - Grace And is that pretty. That sounds pretty labor intensive to make those updates right. [00:07:34.790] - Berend Yeah it is a process that you need to automate. I've seen it happen sometimes that it uploaded had somewhere manually but that's not enough to automate a poem. So what you want is a full live connection that is set up once and easy easy to change also. So if you need to have additional fields from a from your own database it should be able to add it to the system. Sure you can make the right choices upon it. So example can be a customer of ours. They feed their life cycles and they got a different rule in that. So you want to add a field to the feed easily connected to our system and then make sure that you can use it later. So for example if it's in lifecycle one which is a new product you might want to be in a bit more aggressive to to let the market know you're out there. But if it ends and you don't have enough stock anymore more to lost products you probably want to have a different pricing route. So all that customer specific dynamics you want to capture within the system to allow to put rules on that and to automate eventually on it. [00:08:37.390] - Grace And so what about data validation. How important is that? [00:08:41.810] - Berend Very important especially in automation. Data validation is if you if you got to manual step in between somewhere. So if you got a system that you apply some data you do some check you do an analysis and then you get some prize advices and you manually check them and upload it to the system. You actually got manual steps going in between which you can verify does this system do the right thing and then you can upload it to your own system. Unfortunately nowadays dynamics they go way faster so meaning that you need to change your price multiple times a day over your complete assortment to be able to do that you don't go into manual checks in between. So you want to fully automate it and you want to trust the system on it. So you want to actually data all the data that comes in is a certain data validation. So we make the right choice every time and you can then automatically change your price to it without doing any manual checks in between. That means you need to build a whole system around it that supports that the dusted checks and that has the right feel safe in place and eventually that you feel comfortable automating the practice of your full assortment within maybe a couple of boundaries but you want those boundaries to be as wide as possible. So you actually automate the biggest part of your assortment continuously which is a quite a challenge. [00:10:05.210] - Grace Yeah so I was going to ask. So that sounds that sounds like it's I mean how much manual labor do you think goes into just building that kind of a system. [00:10:13.550] - Berend There is it's all often I think underestimate it. Um building a complete system with the right failsafes in place takes probably a year's worth or two to do completely. There's not only data validation but is also the validation in later steps in the system so you get the validation of the data which is the input then you've got certain rules you apply and you want to change those rules continuously. So any change you do in those rules. Every little change you want to allow the end user to do that immediately but that means you don't have much time to check all validations upon it. Um building a complete system with the right failsafes in place takes probably a year's worth or two to do completely. There's not only data validation but is also the validation in later steps in the system so you get the validation of the data which is the input then you've got certain rules you apply and you want to change those rules continuously. So any change you do in those rules. Every little change you want to allow the end user to do that immediately but that means you don't have much time to check all validations upon it. So the system itself should due to changes within the developed nations within the system so you can change the setting. It's validated immediately that it's correct and does the right thing and then you can automate upon it. So it's a it's even more than just data validation you also need to validate all the settings around it and all the changes you do. [00:11:15.920] - Grace Yeah that sounds like an undertaking. [00:11:19.260] - Berend Yeah. [00:11:20.010] - Grace Um so moving into the the pricing logic. So can you explain that a little bit in the pricing rules and what. So if someone wants to build their own system, what do they need to know about pricing rules and pricing logic [00:11:32.630] - Berend Yeah. So what you often see is you've got a dataset of all your competitors so you know who your competitors are selling the same products. You can start making choices upon that. There are different level of choices. So what you can do you can follow a certain competitor and saying OK I want to follow competitor A and change my price which is which is quite simple. You can also follow a group of competitors at the cheapest price of a certain competitor. You can also grow a bit more advanced and say given the past performance if I follow certain competitor then I see this happening. It means I need to have a certain distance of that competitor to have an optimal price. So that's more towards intelligence. You can build that. But what it means you need to think about the whole strategy upfront and then you need to ask your I.T. department or your BI team to build all those rules and what you don't know most of the time in advance is how will certain things react in the market. How will your competitors respond to your changes? So what we often see happening if if our customers build their own system is that they want to think about everything that's going to happen in advance and they want to implement it. And that means that it's a very big change you want to do at once which is scary. You want to validate that and it's difficult to implement what you actually want to allow to use it to do in those rules is like also I think Travis mentioned in his last podcast is you want to use your to take baby steps and iterate all the time. [00:13:12.630] - Grace Side note: Berend is referencing a recent episode I did with Travis Rice one of our customer success managers. I'll link to that posting that description below. If you're curious it has price points Episode 3 [00:13:25.290] - Berend So do a small change first maybe take a part of the assortment. Do a simple strategy change implement let's see what the results are. Learn from it and change it again. If you want to allow users to do that you need to have a system not only pricing rules but actually a full interface around it which provides users the insights in the market so understanding which other competitors that are selling my products. How do you response to changes. I do. What are my margins I make on each price level. So if I follow a competitor A Do I still have enough margin left to make a good profit. All those inside you need to capture within the system. So you need to have a portal around it to provide your insights from those insights. You can set new rules and new rules. Indeed you can put in your own I.T. system what you want you actually want to allow is the end user to each time he he thinks of opportunity big or small you want him to be able to execute that immediately. There should be no barrier to changing that rule because if you lowered a barrier it means they can experience more they can build out their systems step by step and eventually you will have a way better pricing system. [00:14:42.310] - Grace Sorry to interrupt but so that you also want to be able to do this on a product level. Right? [00:14:46.810] - Berend Yeah. Yeah. So you want actually to do it on every cross-section of your assortment which is important to you. Sure it can be simple things like categories or brands which are fixed subsets of your assortment but it can also be on product level if you really want to do it. We most of the time digital files to go to product level changes because that goes against automation. So what you actually want to do you want to think about okay Why do I want to change this specific products to a certain price. Often there's a logic behind it. For example the product is in a certain promotion so I need to fix that price for a certain period. What you what you can do is get all the product ideas and set a fixed price to it about what you actually want the system to do is recognize that it's a promotion for all the product that are in promotion just used to promotion price. That means each time a party goes in promotion automatically the system changes to that price. That means it saves you tons of labor and you can build your pricing strategy piece by piece and eventually focus on the strategy instead of the execution which is which is key and you want to have a system that allows you to do that. [00:16:01.830] - Grace And does Omnia and let you do that? [00:16:03.160] - Berend Yeah. Yeah. So the promotions is an example. The lifecycle for products I gave earlier is another example. But also what you can do you can import any viable that you provide into a feed or into a connection to own the app. So there are a few fixed variables like to get original brands more dynamic for rivals like a promotion. We're still quite static but you can also go way more advanced and thinking okay what is my stock level that continuously changes and what are my skills over the past weeks. And if I got too many weeks of sales left I might want to go more aggressive so then it becomes more dynamic and within Omnia you can connect each field quite easily so once you got to connect set up you get a list of fields and you say Okay I want to use that we've been on here you can alter it a bit if you want to should do a calculation opponents and then we import it multiple times a day with the latest values and then based upon all the changes that are happening during a day we can set automated rules so that your strategy is being executed continuously to the to the product level. [00:17:15.160] - Grace So then once you have the price advices you will want to be able to put them in a store right. [00:17:20.620] - Berend Yeah you want to. Once you have calculated the new prices you want to upload them to your e-commerce platform where you display them on your website or even third area you want to also change them within the stores itself. So what you see happening more and more is that retailers have electronic shelf labels to be able to cope with the dynamics of the online market of the online competitors I must say. So you need to allow the system to do it continuously and you once to not have any manual steps in between. So you want to have the system calculate everything from the data to the logic and then providing prices back as the market changes continuously during a day you need to change prices at least once or multiple times a day. That means you can't have any manual steps in between. So that means you need to automate fully. Being able to automate fully, you need to validate all the steps in between you need to know you're safe. So what you want to do is you want to make sure that within certain boundaries you can have loads automatically and fully and can trust the system to do so. That is a big challenge. So that's the whole chain from the data input you getting to where you export you need to have four steps in between validating data validating calculations should do. Validating that export is right versus what you did before and then you say OK it's within a certain boundary within a certain safety I will love that change to go on that for in-store infrastructure that takes a lot of time to build. So you need to invest that time. Otherwise you can't automate and if you can't automate you can't keep up with the markets and you won't have the benefits from a dynamic pricing system. So you need to do that for your full assortment continuously. So it's the infrastructure around it which is important. And on top you need to have the raw calculation power because well to update everything to get all the newest competitor data prices you calculate that to the newest price advices and to export at a low of processing power going on so you also need to invest in the infrastructure around it to support that. And eventually if you have those those both you can upload it continuously to your system and make sure that once something changes. So either your own internal purchase price changes. That means there's a new optimal price or if a competitor changes the price you want to capture those signals and then upload immediately back to your system. The newest optimal price so you can keep up with the dynamics of the market and get the most out of it. The dynamic pricing system. [00:20:08.170] - Grace Do you think it's worth it for enterprise companies to try and build their own dynamic pricing system? [00:20:14.740] - Berend It's always a trade off you need to make. I would say 9 out of 10 times it's the work that goes into is underestimated. We got 7 years experience both in building a system but also in the knowledge around it was needed to execute a right pricing strategy. That's a lot of head start we have to for our own companies to build something like that is on the same level we do. That means you need to invest a lot of resources in it both in the I.T. side as well as on the more the business side so what we need to do what's the business logic. How are the markets reacting. Well the I.T.. It's building the first set up but also maintaining it and doing all the iterations upon it and building the system around it, so a portal and a few full execution. That's a lot of work. And while every company has is the I.T. resources are really scarce. So then it's a question do you want to invest for five developers full time building dynamic pricing system or do you want to invest those guys into building your e-commerce platform or well anything that's important for you or for your everyday sales. Often that's right of goes to building your own platform and if you use a third party too it means you get more developers left on building the things that are important for everyday sales and leaving the bring pricing to a third party tool. And on top a tool like ours allows end users like the category managers or the marketeers to use the system themself without any I.T. interference. And so that means you you can be more powerful so every idea you have you can execute immediately and having that I.T. boundary there it means that you want iterate as fast and you want won't build the full strategy you want it to to be to make it a success. [00:22:20.530] - Grace So for the final question is there, if people are really convinced that they want to build their own system do you have any final advice for them? [00:22:32.230] - Berend Yeah I would say be sure that you invest as much time in the portal that supports it as you do in the logic and the data itself. Without having the right portal an interface around it it will not be adopted by the users within the company and the change management and adoption that is needed within a company. You won't succeed if you don't allow people to get along on that journey. To understand why you're making certain changes and to encourage them to think about destroying itself and to enable them to be able to change it without any interference of I.T. spend time on that because that's as important as having rights I.T. logic underneath it's allowing the end user to iterate continuously to have the insights it will enable them to do a better job than if they are blocked by any possibilities. So I think that's the key thing we learned over the past years. You need to take everybody along so it doesn't. So it is not the black box. You have the right insights and you allow the flexibility within the tool so people can actually use it in their everyday lives and improve continuously. [00:24:00.570] - Grace All right. Well thank you Berend. This has been super enlightening. If people want to get in touch with you, how can they reach out to you? Yeah you can always be in touch if you want it know by email. So that's Berend at omnia retail dot com. Or call the office here. I'm happy to um to talk to you and you can always reach out on LinkedIn if you want to. [00:24:21.850] - Grace Cool. Perfect thank you Berend. [00:24:23.840] - Berend No worries. [00:24:32.460] - Grace Thanks for listening to price points and I hope this episode was enlightening. If you'd like to talk with Berend you can reach him via email or via LinkedIn and you can find both of those in the show notes. As always if you'd like to talk to me, you can also see my contact details in the show notes as well or contact us via our web site. But for now have a great rest of your day. SHOW NOTES: Omnia was founded in 2015 with one goal in mind: to help retailers take care of their assortments and grow profitably with technology. Today, our full suite of automation tools help retailers save time on tedious work, take control of retail their assortment, and build more profitable pricing and marketing strategies. Omnia serves more than 100 leading retailers, including Decathlon, Tennis Point, Bol.com, Wehkamp, de Bijenkorf, and Feelunique. For her clients, Omnia scans and analyzes more than 500 million price points and makes more than 7 million price adjustments daily. Website • LinkedIn Music: "Little Wolf" courtesy of Wistia TO CONTACT TRAVIS RICE: Email:gijs@omniaretail.com LinkedIn: Visit here TO CONTACT GRACE BALDWIN: Email: grace@omniaretail.com LinkedIn: Visit here

What's the top trick to getting the most out of dynamic pricing? Communication. In this episode Gijs Schuringa explains why organizational clarity and communication is crucial to dynamic pricing success, and gives you...

What's the top trick to getting the most out of dynamic pricing? Communication. In this episode Gijs Schuringa explains why organizational clarity and communication is crucial to dynamic pricing success, and gives you actionable ways to ensure you have organizational alignment. [00:00:09.800] - Grace Hello and welcome to price points. The podcast presented by omni retail. I'm your host Grace Baldwin and this week we're talking about organizational Clarity and communication around dynamic pricing dynamic pricing software is a big organizational change and in our experience here in Armenia a lot of customers who are just getting started don't understand how many different parts of their organization can benefit from this institutional shift. The benefits go far beyond your pricing department and can extend as far as logistics merchandising marketing and more. The key to getting the most benefit out of a dynamic pricing software is to make sure you have the right people present for the conversations around the tool. To explore this a bit more. I talked with one of our onboarding managers here at Omni. His name is Gijs Schuringa her or how you actually pronounce it. Courtesy of Esther de Winter who is our marketing manager, Gijs Schuringa. Many of our non Dutch customers just call him Mr. G. Born and bred in Amsterdam, Gijs started his career as a digital consultant at Magnus Red a management consultancy here in the Netherlands. He moved to Omnia in February, and has been an excellent addition to our team since. Gijs has an infectious enthusiasm for life, and there really couldn't be a better person to help our customers get started with Omnia. Gijs and I chatted about what he thinks is important for companies going into the dynamic pricing process, how you can discover who needs to be at the table, and more. So sit back and relax and enjoy this interview with Gijs. How are you today. [00:01:45.680] - Gijs I'm fine thank you. How about you. [00:01:47.260] - Grace I'm doing well. Can you tell me a little bit about who you are, how long you been at Omnia, and what exactly you do here. [00:01:55.370] - Gijs Yeah sure. So name is Gijs Schuringa. I have been with the Omnia since the start of February. I am the customer onboarding manager here at Omnia which basically means that I will be helping all our new customers retrieve value from our tool as soon as possible after signing contracts. That's it. [00:02:14.270] - Grace Today we're talking about alignment of course and is that a big part of your job. Do you have to help people align on what and get all the different parts of an organization aligned together to make dynamic pricing a success. [00:02:27.650] - Gijs Yeah I think it's a it's a very important part of the onboarding and this is of course not only the alignment between the business and I.T. but also within the business there is various departments that need to be aligned on what you're trying to achieve with your dynamic pricing. Otherwise there will be unhappy departments within the organization. [00:02:47.430] - Grace And so what are the departments that you usually try and bring to the table. [00:02:51.470] - Gijs It really depends on what customer we are implementing. For example within a e-commerce pure player it's always quite easy to have all the right people in the right place. However if we look at more traditional retailers there's often various departments that need to be aligned within the implementation to ensure everyone feels their needs are being taken into account. The traditional organization you have big for example merchandising departments who sometimes are in charge of pricing for online on the player. There's not very often a merchandiser they are there sometimes there but it's different. [00:03:27.860] - Grace Why do you think clarity is. Do you consider it a vital part of dynamic pricing. [00:03:34.070] - Gijs Yeah I think it's really important that every part of your organization knows what you are doing because it is quite a transformation that you're going through. And if departments feel left out this could really jeopardize the long term success of your implementation. [00:03:48.830] - Grace So this alignment isn't something that you typically see people have already done before you get involved to before they've actually started the dynamic pricing process or is it something you really kind of coach people through. [00:04:00.740] - Gijs I think it needs to be present in both during the onboarding as well as during our sales cycle or even before that first alignment of course starts before you starts in the sales process. However during the sales conversations you'll probably find out stuff that you haven't thought of before so that will probably require some alignment as well. But then when we really start the actual onboarding there's a lot of things coming up that a lot of organizations do not think about beforehand and therefore often I see during the onboarding that we need to add in other people in the conversations that we hadn't thought of before. But just to make sure that we have all the relevant information and stakeholders at the table. [00:04:40.520] - Grace Is there someone that you're always invited to the table that a lot of retailers or brands kind of forget about. [00:04:45.860] - Gijs It depends really on the organization. So for example sometimes we are at an organization that has a clear pricing department and often there the feeling is stand that there should be capability built within the pricing department. However I feel it's really important that for example your procurement team is also involved or your category management because they are also often involved in for example the purchasing and purchasing is of course an important part of your pricing. So if you don't have access to your purchasing prices for example or your logistic prices your marketing costs these are all things that you want to take into account when setting your price. So therefore it's really important that all these different people are aligned so that we know what to take into account in our dynamic pricing capability. [00:05:30.380] - Grace What happens if there's not this alignment. Have you ever experienced that? [00:05:33.830] - Gijs So far I have not because I think before we go live at our customers you'll see that they do some testing and also a line within their companies to see whether these test results actually make sense and during the testing we often stumble across things and departments that we haven't thought about. And then they get involved and then the strategy gets adjusted accordingly so that before we go live we have all the people at the right place [00:06:00.290] - Grace Happy and enjoying it getting the most out of it. [00:06:02.940] - Gijs Exactly. [00:06:03.980] - Grace So within onboarding there's a couple of different meetings right now. And so you invite people in so you have all the stakeholders present at that meeting. Is that the only time that everybody's in the same room or is it the only time you facilitated or is do you want that alignment to continue outside of the workshops. [00:06:20.210] - Gijs I think it's more important even outside the workshops. Of course it's important that they are in the workshop. However most of the testing and getting familiar with the tool and the pricing strategy is happening outside these workshops. So what I always suggest my customers is to have sessions internally where they test and go through the tool and understand really what is happening under the hood and also after the implementation. This alignment needs to continually be present throughout your organization because if you only align during the implementation and then tool arrives in a silo again any changes that happen within your strategy will not be understood by your colleagues and then you have misalignment again. So yeah it's really not only a tool for implementation but really a business change or transformation so to say so I guess implementing that in pricing means you transform the way you work from that point onwards. [00:07:16.170] - Grace And do you feel. Do you ever experience some sort of resistance to that or now do you think. Do you feel feel like people are afraid to change how they're working? [00:07:25.960] - Gijs I think for a lot of organizations there is a little bit of hesitancy to start with dynamic pricing. They might feel that they will be out of control and that there is an algorithm deciding what's happening and they won't be able to understand why or what. And this is also one of the reasons that we in I have a Show Me Why button which all users can always press and it will show you on the product level how certain price has been decided. I think that's quite important. What you also see in terms of resistance is if you don't align beforehand. For example if you were omnichannel retailer and the online departments want to implement dynamic pricing you can then stumble across the fact that you won't be able to update your prices in the physical shops as fast as you would want to. And then this could lead to a lot of resistance within the offline departments which in traditional retailers are often also the powerful departments. This can really hinder the process of implementing that in pricing. [00:08:27.520] - Grace And so in that example what do you then advise are ESLs. [[00:08:31.810] - Gijs Yeah. Yeah it could be an option for these retailers however for example if you're a fashion retailer it's quite hard to implement ESLs. Another option would be to for example only reprice once or twice or three times a week only in the evening. Another question you could ask yourself is do we per say when to have the same prices in-store as on this website that's a strategic choice you need to make as a retailer. Another option that we saw and one of our customers was that they said with our dynamic pricing in the stores we just have the recommended retail price on the price tag. And if due to our dynamic pricing prices would have been lowered then at the cash register they'll have a lower price. So that will need to price them and make them even more happy customers. [00:09:21.580] - Grace But they don't do it if like their online price is higher? They'll just they'll cap it in-store at the recommended retail price? [00:09:28.810] - Gijs Yeah. And online often as well. So the price on the price tag is the maximum price product could be at. And if you're lucky at the cash register you'll find out that you even have to pay less. [00:09:38.320] - Grace I wonder that if consumers then know that they're checking the prices in stores probably right. [00:09:43.880] - Gijs I think nowadays consumers in store check the prices. Like if you're somewhere and somebody see a pair of sneakers for on the euros and you check online and you can see okay I can get them for 90 euros here. That's a 10 percent difference. That makes sense to them. Get them online. But if you then in the store hear, "Yes. But our online price you also pay here. However we can do updated that frequently. But we will always give you our best price." That also creates customer satisfaction. [00:10:11.960] - Grace And so then coming to a strategic choice like that that comes from having the offline department also in these conversations about your dynamic pricing. Right [[00:10:20.890] - Gijs Yeah. [00:10:21.740] - Grace So what happens when everyone is aligned? [00:10:26.710] - Gijs I think when everyone is aligned you get strategies that maybe without aligning you wouldn't have kind of. So by having all the different departments thinking about your pricing strategy and really looking at how we can get most out of the dynamic pricing tooling. Yeah that really works well for an example of this is when retailers add in stock levels. So for example in logistics departments join in the conversation. They say OK if we know this beforehand then we can add in our stock levels in our pricing strategy and prevent from having to go into the end of the season sale. But already throughout the season taking into account stock coverage and stock levels dynamically price based on that throughout the season and in the end have a higher margin on your SKUs. [00:11:11.920] - Grace So by that you mean instead of waiting until the end and then you have this huge surplus, you can follow the market a little bit more and maybe price a little bit more competitively to sell more throughout the season and earn higher margins than just doing one big bulk clearance sale. [00:11:26.500] - Gijs Yeah exactly. So what you see in traditional retail a lot is that throughout the season price stays the same. And then at one point you go into sale and you immediately go into 30 or 50 percent discount. If you were to reprice based on your sales volume and your stock levels you could also already throughout the season maybe drop a little bit in price, be most competitive in your market, and then already make sure that you don't have to go into the deep end of the season sale. But these are things that really you need alignment between the different departments to come up with these kind of thing. [00:12:02.710] - Grace So in that example what are the different departments that would align? So your pricing, marketing, [00:12:06.740] - Gijs Yeah logistics is quite important in this one. Yes. And also of course our team because it's for some companies quite hard to feed these kind of data to. Yeah. So it's very important to have I.T. involved from the start to make sure everything we want is also technically possible. [00:12:25.360] - Grace So how can organizations actually like what does a practical way that organizations can maintain clarity or other dynamic pricing and make sure that it's a success. [00:12:34.780] - Gijs I think it's good to keep everyone up to date when you do any pricing strategy update. So whenever anything changes in your settings you communicate that throughout your organization so that everyone knows okay we're going a different direction now. If you're going to become more margin focused then rather than sales volume focus is important for everyone to understand that is happening. [00:12:54.730] - Grace So within that to do that. Do you then do people set up like a slack channel or how do you see people do that actually? [00:13:02.140] - Gijs Yeah I think sometimes it could be as simple as a slack channel in other organizations. It's more often like soap boxing events during like a monthly updates. Okay. Our pricing strategy has changed. We're now moving into this and that. Yeah. There's various examples I think really. [00:13:18.250] - Grace How frequently will these changes be announced? [00:13:20.380] - Gijs Looking at our customers the larger enterprise for example the D2C markets often don't change their strategy that much whereas small e-commerce players tend to test a bit more and play around with it. So therefore in a small store a Slack channel would be more appropriate. [00:13:37.480] - Grace I guess that's kind of a cool thing about software like Omnia is that you can really make it your own right? [00:13:42.500] - Gijs Yep. Yes. So what what we always say during the onboarding is it's not that once you implement Omnia, it will manage your prices and you don't have to look at it anymore. We challenge you to look at the results, evaluate, internally align between departments, see whether you can optimize your strategy, and test and see how you can continuously optimize your settings and your setup and taking into account that your competitors are probably also using dynamic pricing. You probably have to react to their strategy as well and that is also an ever evolving process. So therefore Yeah it never stops. However there is a shift going from manually repricing your products according to your strategy towards really focusing on how can we have the best strategy and for that of course you will need a lot of alignment within your company. [00:14:35.020] - Grace And you also need something to take care of the strategy for you right. Because you can't do the strategy and the manually updating it. [00:15:04.570] - Grace So then my last question for you, Gijs, is do if you have what are your practical tips for really making dynamic pricing a success from the start and for making sure that everybody is online in your organization. [00:15:20.620] - Gijs Yeah. So my first suggestion would be to really start aligning the topic as soon as possible. I would say preferably even before you start looking at what different vendors are out there so that you have you're sure what you're looking for because there is quite a difference in the vendors. And if you were looking for a particular strategy it might be worth already knowing that before selecting your vendor. Another thing what I would always suggest is if there is any unclarity on what you want to achieve, hire a consultant. Dynamic pricing goes really really goes down to the foundation of your business. And therefore I think it would make sense to hire a consultant who could help you out direct your thinking and getting the right people at the table. Lastly I would say whilst you're implementing that pricing already start thinking about how you're going to integrate this within your running processes and how you are going to communicate throughout your company around the topic. [00:16:15.610] - Grace Excellent. All right. Well thank you for talking with me. That was a pleasure. If people want to reach out to you what's the best way to talk. Feel free to add me on LinkedIn or send me an email as I said only a retail dot com call I will put that in the show notes because if you're like me you can't pronounce. It's helpful to see it. So. Sure. Awesome. Thanks guys. Thanks for listening to price points. If you'd like to get in touch a case feel free to send him an email or reach out on Lipton. I'll include his information the show notes because it's probably easier than just listening to me say his name again. If you liked the podcast let us know. I would love if you sent me an email at Grace at the retail dot com to share your thoughts. I'll also include that information in the show notes. In the meantime though I hope you have a great rest of your day. SHOW NOTES: Omnia was founded in 2015 with one goal in mind: to help retailers take care of their assortments and grow profitably with technology. Today, our full suite of automation tools help retailers save time on tedious work, take control of retail their assortment, and build more profitable pricing and marketing strategies. Omnia serves more than 100 leading retailers, including Decathlon, Tennis Point, Bol.com, Wehkamp, de Bijenkorf, and Feelunique. For her clients, Omnia scans and analyzes more than 500 million price points and makes more than 7 million price adjustments daily. Website • LinkedIn Music: "Little Wolf" courtesy of Wistia TO CONTACT TRAVIS RICE: Email:gijs@omniaretail.com LinkedIn: Visit here TO CONTACT GRACE BALDWIN: Email: grace@omniaretail.com LinkedIn: Visit here