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Price Points Podcast EP 9: Which Categories Experience the Most Price Pressure on Black Friday?

Which categories experience the most price pressure on Black Friday? Hidde Roeloffs Valk explains his data analysis in this month's episode of Price Points. [00:00:09] - Grace Welcome to Price Points the podcast that...

Which categories experience the most price pressure on Black Friday? Hidde Roeloffs Valk explains his data analysis in this month's episode of Price Points. [00:00:09] - Grace 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 looking into the holiday season. We've officially entered to the busiest months of the year for retail with Black Friday just a few weeks away and the holidays right around the corner. So to help make the holiday season more profitable for you, we wanted to put together some content that will help you be more strategic in your game plan. This month you can expect a couple of things including a holiday Playbook a blog post about pricing for Black Friday and more. That all starts with the following interview, which I conducted with our consultant and pricing expert Hidde Roeloffs Valk. If you came to our REINVENT event a few weeks ago, you heard the news that Omnia started to excavate a gold mine of price market pricing data that we've had for the last several years, but haven't been able to access. We're starting to gather the first few insights from this huge data set and heeda has been instrumental and analyzing this data and turning it into actionable insights that help retailers and Brands understand the market a new way. For this interview I asked Hidde to run an analysis on some Black Friday data and the results were fascinating. It was really cool to see what hit a learned about Black Friday as well as hear more about what he thinks this year's holiday season will look like so let's just jump in and hear more about the date. Please enjoy this interview with Hidde Roeloffs Valk. Alright. Well, thank you Hidde for joining me in for squeezing minute me in before you go to New York. How are you today? [00:01:40] - Hidde Pretty good, and you? [00:01:41] - Grace I'm doing great. Um, so I wanted to talk to you a little bit about Black Friday and then also about our this new data project. So let's start with the data. What is this project? Where does this data come from? And why do we have access to it now as opposed to in the past? [00:02:00] - Hidde Yeah. This is historic data from all public sources that Omnia connects to. Of course, we have a lot of retailers and brands asking or requesting pricing data across multiple countries, but this was always processed in a daily sense to do Dynamic pricing to do Dynamic marketing to do some analysis on a daily basis, but not so much on a long-term multi-year basis. So our previous data structure was completely different and we took all this old data and restructured it in a new way for us as consultants, as marketing department, and sales department to look at this and provide more value in analyses, true analyses for our prospects and clients and anyone basically interested in retail for free to show yeah how important pricing and marketing is really for everyone. [00:02:57] - Grace Yeah. This has been a huge project that's been going on for the last six months, right? Or even longer? [00:03:03] - Hidde Yeah and during REINVENT we finally showed the first insights really the kickoff of doing more and more data-driven insights for for anyone related to to Omnia. I have to say it's all public data. All public sources that's been gathered over the last few years. There's no sensitive data. In here of anyone so that's an important thing to know. [00:03:26] - Grace Good, good to note that for sure. And so as a bit of a data data geek are you excited about this? [00:03:33] - Hidde Yeah. This is like a gold mine for us. We need to work on this obviously you need to. Have the proper tooling proper hypotheses to really grab the value out of this but this finally enables us to do so much more with the data that we have. Also thinking forward in the future is running new elasticity algorithm. Hopefully testing some machine learning stuff on this data as, yeah, the more data you have the better your algorithms can work and that's beneficial for for all of our clients, of course. [00:04:06] - Grace So what is actually possible with this data? [00:04:09] - Hidde Most notably for now, it gives really the ability to zoom both in so really digging deeper into certain categories or brands or clusters of retailers and Brands and seeing what's going on there. But also zooming out instead of looking at one day or a month. We can find a look at multi-year trends which really gives you a perspective on the retail market and there's insights in there that can you can also use in your strategy. So both both of those are really handy and that would be the first thing we're going to look at the easiest part just uncovering the top of the iceberg basically and after that we'll dive deeper and deeper of course, into this data. But there are so many possibilities that yeah, we haven't discovered them all but we can think of a lot of data-driven insights for our clients, automated advices and new algorithms in terms of price advices. [00:05:09] - Grace I know that I personally am really excited about it to start writing some reports and really create content that's really interesting and unique in that shows a whole lot more about what's happening in the entire retail spectrum. [00:05:23] - Hidde Yeah, yeah, so that will definitely be interesting. As we grow, this data will also grow so the more clients or the more our clients in terms of data request the bigger data warehouse or database becomes and the more we can give back to our clients. And also as a consultant of course is extremely interesting to finally test your thoughts or hypotheses you had about the retail market and test whether they are actually true and so far most of the hypotheses were actually true. So that's been pretty cool. [00:05:56] - Grace That's really exciting, it shows that you've sort of have an idea of what's happening. I guess. [00:06:00] - Hidde We somehow think we're we seem to be right. Yeah. [00:06:04] - Grace So I asked you to use some of this data and give some sort of analysis about Black Friday. Can you explain a little bit about what you actually did when I gave you that request? [00:06:15] - Hidde Yeah. So what we did was looking at certain categories. I did it all high-level. Just just for now we can probably give a deeper dashboard where you can click through the data yourselves in a blog post, but just for now we have gone on a highest level of category. Looking at how is the pricing pressure different in those categories and how have certain categories being reacting differently during Black Friday. So we can see exactly how many price changes were there on Black Friday compared to a week before that. And we also know whether it is a price increase or price decrease. Price decrease, of course, probably promotion. Price increase probably a margin optimization even during Black Friday. And what we see overall, is that more and more retailers and more and more price points, that's what we call a product of a retailer changing in price, more and more of those are changing and more and more retailers are reacting to these price changes. So that creates kind of a snowballing effect in in your data. and Overall this has been increasing but some categories have been increasing more than others. [00:07:31] - Grace Which categories is that increase really really? [00:07:34] - Hidde Most notably it's been the baby category and it's a very wide category. Of course. There's baby hardware, baby strollers, and everything in there. But also Beauty category. And that fits exactly with what we see in the markets that retailers see this pricing pressure is also increasing. These are also categories where consumers seem to be more aware of these price changes that it's that has benefits them to check prices, but also we can tie it towards Millennials who are having babies currently and are more aware of price and maybe yeah, maybe also less willing to pay the highest price. So this creates a urgency at retailers to really change their prices as often as they can. [00:08:26] - Grace So for babies it's there's more babies in the market. And do you think that for Health and Beauty there's something similar where more people are shopping? [00:08:35] - Hidde More people are shopping online for these these product categories. Yeah, that's definitely what we see are across the board and it might be interesting but we don't have that data, of course to see consumer data in this but our feeling is that definitely the growing part of the Millennials is causing this effect.. [00:08:53] - Grace So when you looked into this data, was there anything that surprised you actually? [00:08:59] - Hidde Yeah. Overall what surprised me is that there's also a lot of price increases during Black Friday. So this this can be due to multiple things. It can be that some retailers really price upwards during Black Friday. So they seem to have some margin optimization strategy that they think hey Black Friday already has a huge impact people will shop anyways, this is an incentive for me to grab more margin than normally, more than last week actually. On the other hand. It could also be that there's some automation strategies in here where retailers price upwards when others are out of stock, which makes sense with we've seen the summer, of course again with air conditioners and cooling fans whereas some reason retailers price upwards when stocks were limited. Makes complete sense from an economical point of view, of course where it's always supply and demand [00:09:56] - Grace Yeah, basic supply and demand. Yeah, and so the and that happened this summer actually? [00:09:59] - Hidde That happened this summer. And the last two summers but also seems to happen during Black Friday. Of course overall still price decreases are one to two times more often, but it's not necessarily that it's all price decreases during Black Friday. So also for your strategy you should take that into account and look at that during Black Friday as you might leave money on the table if you're not increasing with the market. [00:10:04] - Grace That's pretty interesting. It's a pretty interesting idea. I hadn't even really thought about that. Do you have any sort of numbers about how these categories are changing so like what the percentage of price changes are? [00:10:36] - Hidde Yeah, so these baby and beauty categories, they changed more than 27 percent of the of the products changing price. [00:10:45] - Grace And that's across the whole market? [00:10:47] - Hidde Across the whole market. Yeah, so it specifical retailers can be high of course, but the price points so if specific product of a retailer about yeah 27 percent change in price in the week of Black Friday. And that's quite interesting. It was more than toys actually, which is traditionally a very important category in in this Black Friday to to Christmas and in the Netherlands of course Sinterklaas, but these categories have catched up [00:11:14] - Grace Were there any numbers about health and beauty? [00:11:19] - Hidde So yeah both were 27 percent this last year. More than toys which was 25%. [00:11:26] - Grace Okay. So these are obvious. This is obviously from the last two years. Correct? Yeah. What is what do you think that means for this year's [00:11:36] - Hidde Yeah, so I expect really to have these categories even more increasing. There's a clear trend over the last two years that they they've increased in the amount of price changes also in the percentage of price changes. Computer electronics is always the highest and all over data. It seems to be the most pressured in pricing and has the most price changes. So I expect that to increase a bit more last year. They they increased from 32% to 36% in in price change, which is huge as more than one in three products change in price across the board. [00:12:11] - Grace And that's consumer electronics? [00:12:12] - Hidde Yeah, and there's millions and millions of products, of course in there. So that's that's very interesting but not surprising. [00:12:18] - Grace And just that's just the number of products that change that's not a number of products that go up or go down. They just change. [00:12:25] - Hidde Yeah, yeah. [00:12:26] - Grace So you expect more you just expect there to be an increased number of price changes this Black Friday. [00:12:32] - Hidde Yeah. Yeah. Definitely I expect these these categories to continue catching up with electronics. So some categories might even hit hit above 30% currently only electronics above 30% but could be that baby and and sports and beauty could hit this 30% which is crazy. Instead of one in four products it's one in three products almost. this is interesting for retailers and consumers as they need to be aware of this for their strategies and buying or for their own prices, of course. [00:13:04] - Grace Are there any other categories that you expect to see high number higher than average number of price changes? [00:13:11] - Hidde Yeah, one other is sports travel outdoor category, of course with the winter coming up, but also overall this is an increase in category in the amount of price changes that we see. [00:13:25] - Grace But so the price. The increase hasn't been so drastic as baby and health and beauty? [00:13:31] - Hidde No. [00:13:32] - Grace And so thinking about increases versus decreases you what's the let's what do you mean by this 20% of the prices decrease? [00:13:43] - Hidde Yeah. So all in all, we've seen that a lot of prices decrease during the Black Friday week. Of course, you do promotions heavily promote it so across all products. It was around twenty percent. So all categories and some categories higher some categories lower but overall one in five products change in price. [00:14:03] - Grace That's insane. Yeah, like that's a real and it's... How can retailers actually stay on top of that? [00:14:12] - Hidde What is very important is make sure you have the right data for your site and you make sure you have the right data sources where your consumer is looking for these products, but also where your competitors are active. So choose to right data sources. Also during this this Black Friday some prices go up some prices go down . So some competitors go up some competitors go down. So on a product combination level with the competitor you need to know where to react, where to pick your battles. Basically maybe sometimes you don't want to go down maybe sometimes you want to go up and sometimes you need to go up or the whole market is going up. Then you need a high frequency of these updates because during these these days or weeks, every hour products can go up, products can go down, and you need to know whether you want to go up or down. So you need full automation and you need a higher frequency than normal, I would say yeah. [00:15:09] - Grace And do you have any advice on knowing where to react and when not to react. So how do you actually choose that battle? [00:15:16] - Hidde Yeah, you need to decide that in your strategy in these weeks. So maybe particular sub categories where you don't have a focus leave that out. Or maybe make combination deals that nobody has. So combining products or it's hard for the consumer to compare but also hard for your competitors to compare. So it's more and more steering your assortment that's going to be very important together with the right price strategy during these weeks. And it really helps to already think about that now instead of on that day, of course. [00:15:49] - Grace Especially considering there's this new Google data that's showing that 40 almost 40 percent of people have bought gifts already before Black Friday for the holiday. So even the weeks leading up to Black Friday are really important. And so if you're a customer of Omnia, for example, they can also reach out to you and say hey, can you help me a little bit? [00:16:07] - Hidde Exactly exactly. We can definitely talk about getting them to right data in order to be successful during this Black Friday. [00:16:14] - Grace Perfect. All right. Well, I think it is there anything else that you think that we've missed? [00:16:19] - Hidde No, not for now. We're going to dive deeper into the Black Friday data and hopefully afterwards to do a little summarization. [00:16:30] - Grace Well, thank you Hidde. I'm really excited about all of the hard work that you've done and took into analyzing this. I'm really excited about the future. And then if anybody wanted to reach wants to reach out to you, I will leave your information in the show notes. [00:16:44] - Hidde Awesome. Thank you. [00:16:44] - Grace Great, thanks! So wow. Thanks again for listening to Price Points. I really hope this episode gave you some inspiration on how to tackle your Black Friday game plan. If you'd like to talk to Hidde, you can reach out to him at hidde at Omnia retail.com or via LinkedIn. He has a wealth of knowledge about this topic and is happy to talk data and pricing with you at any time. Even if it isn't about Black Friday. If you'd like to chat with me, you can also find me through the same channels. That's Grace at Omnia retail.com or via LinkedIn. For now though. I hope you have a great rest of your day and a fruitful holiday season. See you next month on Price Points 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 VALKA: Email: hidde@omniaretail.com LinkedIn: Visit here TO CONTACT GRACE BALDWIN: Email: grace@omniaretail.com LinkedIn: Visit here

Price Points Podcast EP 8: Why is Data Important to Dynamic Pricing

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

Price Points Podcast EP 7: Are Your Private Label Products Overpriced

Are your private label products over (or under) priced? Hidde Roeloffs Valk, Solution Consultant at Omnia, explains how a reference pricing strategy helps you optimize your private label products and keep them at...

Are your private label products over (or under) priced? Hidde Roeloffs Valk, Solution Consultant at Omnia, explains how a reference pricing strategy helps you optimize your private label products and keep them at market-level prices. [00:00:10.590] - Grace Hello and welcome to price points. The podcast examines the changing world of e-commerce. One episode at a time. I'm your host Grace Baldwin. And today we're talking about strategy more specifically we're going to talk about reference pricing. So a few weeks ago we published a blog post about reference pricing but since it's such a fascinating topic I also wanted to do a show about it to me reference pricing is a blindingly simple solution to a problem that a ton of retailers face. It's one of the solutions that's so simple it's no wonder that nobody really thinks of doing it. In short reference pricing is a great strategy for any retailer who makes a private label product and wants that product to be competitive on the market. Traditionally stores haven't been able to use dynamic pricing on products like these because the G10 for that product doesn't exist beyond that store. Reference pricing makes it possible though with a simple three step process First you need to find a product that's similar to your own to serve as a reference point. Second you need to determine the relationship you want to have with that reference product. Third you need to put the G for both products and that relationship in the form of a business rule into your dynamic pricing system. And let the tool take care of the market pricing. So see what I mean when I say it's actually pretty simple. I sat down with the author of the blog, Hidde Roeloffs Valk, one of our solution consultants here. If you listen to the podcast for a while you've already met Hidde. But if not know that he is obsessed with anything to do with pricing and is exceptionally passionate about his work. You can learn more about him in price points Episode 2 and I'll include the link to his post in the shownotes. In this conversation we talked more about reference pricing, where the idea came from, what kinds of categories it works best for and more. So please sit back and enjoy this episode. I think you're going to like it. Thank you for joining me again about this [00:02:09.950] - Hidde No problem. [00:02:10.660] - Grace And so yeah. Again I want to talk today about reference pricing. So we've talked about this in the past and you wrote a blog post about it. And I'm just curious. So what exactly is reference pricing and why would a company actually want to use this strategy? [00:02:29.180] - Hidde There's a challenge within retail or basically in pricing where no products are directly comparable and there's companies that want to have a pricing set based on their competitors. That's also in a previous blog post competitor based pricing fairly commonly used. It's easy to, use it's simple. You just need the data and the tool, obviously. But let's say I'm selling a Samsung TV as a retailer. It's easy to match that Samsung TV one to one like apples to apples to the same Samsung TV sold at another retailer. So that's competitor based pricing in a very short sense 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. [00:04:29.120] - Grace And so by that you mean so you take the GTIN of your product and then you do it within the system you reference it to the GTIN of another product that's sort of comparable. [00:04:38.660] - Hidde Exactly. So there's some manual work involved there's no algorithm that I know of that can do this for you. There's a lot of factors at play. Buyers and category managers are really the product experts in this and you need their opinion on this. I don't think data scientists know the products very well they know the data very well and there's so much subjective about the quality of a product that this cannot be captured currently in algorithms in my opinion. So there's some manual work at the start involved. Every product that you want to apply reference pricing to needs to be linked to another product. But however it is applied at some of the retailers I know and they've had great results because in the end if you're selling private label products your margins are often higher there. But people forget that the price is relative. [00:05:33.290] - Grace Some people you mean by people you mean within the retailers or you mean consumers. [00:05:39.410] - Hidde Yeah consumers don't forget it. Consumers shop around they shop for advices they Google reviews and in these reviews sometimes it's referred like, "Hey, this product is better than product X," and that's kind of stuff. So why wouldn't you refer to price then towards that product. So yeah it's it's they would be the people would be buyers and category managers that would set they are experts and hopefully in accordance with the pricing manager ideally. [00:06:12.880] - Grace And then I think another thing that's maybe worth touching upon is what do you how did you come into reference pricing? [00:06:20.010] - Hidde It's basically an idea I had about three years ago working with the first pricing implementations here at Omnia. And it. Yeah. I said earlier it combines value based pricing which I did often at my previous company and competitor based pricing where Omnia is of course an expert in, and this finally combines those two worlds. I've advised multiple clients but since this year some clients have done it and that that has made us quite enthusiastic about it because their results were great. We can't disclose any numbers about that but they were really really happy about both revenue and margin impacts. [00:07:03.170] - Grace So like if you had to give a scale of 1 to 10 and happiness where would you put them? [00:07:09.480] - Hidde An 8. Yeah yeah. [00:07:11.950] - Grace And did they, did they come up with this independently or was it something you advised. [00:07:16.070] - Hidde The interesting part was they came up with this independently. So we didn't even advise it. We sometimes mention it in meetings but it's not something standard. We only mentioned it when we feel that is needed to mention it as it's quite an advanced really advance dynamic pricing strategy and it does take some time where people first want to focus on getting their grasp on dynamic pricing. But I think if you're really searching for a next phase target in dynamic pricing this would be something really ideal. Or if you're struggling with your own brand products and really having to question how do I price them what what can I do or what should I do. It might be an ideal strategy if you're having a hard time selling those basically and it's low risk because you have a lot of margin left if set up correctly you can take it within small phases and not have a huge price distance yet. So with the right guidance the right tools yeah, it will have no negative impact on on your margins. [00:08:26.680] - Grace Is this a common practice already? [00:08:29.650] - Hidde It's not really common. So I think there's multiple retailers that can benefit a lot from this, doing it on the short term as not a lot of retailers do it. So you have quite some advantage over there. It does take some time but it can be, as a margin optimizing strategy, I think it can be really really helpful. [00:08:50.260] - Grace And it just it really takes more time in the beginning right. And then once you have it set up it's pretty easy to manage as any other dynamic pricing strategy. [00:08:59.110] - Hidde Exactly. So this reference pricing in general is not something that's standardly available within pricing tools as it's very customer specific. Also the tactics around it are customer specific. Am I gonna refer to one or more products? Which products? And how do I implement that? On which which frequency do I want to update those prices? Those are very very customer specific but in the end the rules can be made fairly simple you just need quite some data and quite some qualitative analysis from the experts. [00:09:37.950] - Grace The experts being the Category Managers and Buying Managers. [00:09:41.390] - Hidde Yes exactly. So it's working together of both maybe even data scientists pricing managers and the buyers and category manager who know the products and the market more than than anyone. So yeah and that's interesting to see. [00:09:56.690] - Grace What sort of products does this work well for? So we've talked about and the example you used in the blog post was about light bulbs. Are there any categories that this is especially useful for? And are there categories where it's not useful? [00:10:12.310] - Hidde I would say categories with, where people do extensive research. It's really really powerful because they're, the consumer's more aware of these differences and it's more transparent. So in lighting one light bulb might not be a huge purchase but in this particular example these are purchases where a company buys a thousand light bulbs and then these price differences add up. And then you look for quality differences perhaps and then these these things pop up. But I would say more expensive products where it definitely matters more for food people agree that it's just less quality and that's more fast moving so I would say for slow moving consumer goods as this works really very well. Of course it can work for both ends but I think the impact is higher. What I see across Europe is with more expensive products [00:11:10.250] - Grace More expensive slow moving consumer goods. [00:11:12.650] - Hidde Yeah. [00:11:13.030] - Grace Can you reference more than one product at a time. Or does that have to be one. So if I have my computer here can I also reference it to a Macbook and then also to a Samsung computer or do I have only pick one of the two? [00:11:27.300] - Hidde No definitely there is multiple ways to go around it. And I've seen different stuff. It's it's more of a tactic really and the implementation that you apply towards it. For instance you could map it to words several products and maybe take the highest or the lowest depending on that day's information that you have or maybe the most popular one according to some data. So yeah if you make if you have the data and you make a choice then you can automate that within your reference pricing strategy definitely. [00:12:01.410] - Grace So you can say okay I want to be between computer X and computer Z? Like I want to be exactly... [00:12:08.190] - Hidde Exactly, that can also be done. In theory you could also take the average of those three or maybe 10 percent of that and 20 percent of that. [00:12:17.760] - Grace It's a value gap analysis is the term correct. Determining okay. My I want to be price X compared to Competitor A. Like I want the price difference to be 20 percent. How do you actually go about building this analysis and determining this gap? [00:12:34.770] - Hidde So one way to look at it and that's some of my my previous work at Simon Kucher. Where they do lots of projects about value based pricing. And basically reference pricing is, in my opinion, one of the few pricing methods where you combine both. [00:12:50.520] - Grace So just to clarify at this point when Hidde says "both" he's referring to both value based pricing and competitor based pricing. [00:12:58.300] - Hidde And value based pricing starts off then with mapping out your assortment based on some characteristics. So first you look at what are the most important characteristics according to to consumers or consumer segment that I'm looking at. I would order those and maybe take the first five and order my product categories within value of those characteristics. For example something fairly simple a TV Samsung sells three TVs of the same product type for instance but it has a 50 inch screen, a 60 inch screen and 70 inch screens. Those are characteristics so you can already map out the value the 70-inch screens of course worth more than a 50-inch screen. So in that way you already see as sort of value map within your own product assortment and then it's key that for every step in that value map you can have a reference products where you'd say OK that 70 inch TV needs to link towards a 70-inch TV of a competitor. [00:14:06.170] - Grace OK. So you're just basically you just rank it sort of what consumers care about most. [00:14:11.770] - Hidde Yeah. And that would be the way to go. But in the end you need to do one to one pricing so you map out the most important characteristics and you'd look for those characteristics at a relative products and then refer to those in price so maybe the 70 inch TV screen of my competitor is made of plastic and mine is made of glass. Well that would be in my opinion a 10 percent price difference for instance according to the to the expert. [00:14:41.100] - Grace So you come up with this 10 percent and that's just based off of kind of you know the two materials and where you're where your commercial objective is and what you want your pricing perception to be. [00:14:50.190] - Hidde Ideally this would be based on a consumer willingness to pay. And that's the value that we're searching for. So whatever value the consumer attaches to it you want to to optimize margins optimize revenue. You want to "exploit" between brackets. Yeah between quote marks. Actually you want to exploit that and use that to maximize the pricing. Or just take the relative price distance. Yeah. Depends a bit on the situation of course. [00:15:19.350] - Grace This gets into a little bit into price perception. And so if you're a company and you're creating a lot of private label own label things. But the quality. So how do you manage your price perception if the qualities of say you make TV but also candles you're a big sort of overall retailer and the quality of TV is is lower than your reference product but the quality of like your candles are higher than whatever you're referencing. How does how do you manage that price perception? [00:15:50.040] - Hidde Well what you could have is those private label brands can have other names so maybe you're selling the private label really under your own name but selling the candles under a different name which has more of a premium feel and look to it. So that that's one way to manage it but also of course in terms of pricing. But ideally in pricing consumers get a feeling attached toward a certain brand. Same example of it in the car industry, you have Volkswagen and BMW everybody knows BMW is more expensive, more quality, high quality and Volkswagen is less expensive. So that's very deliberately done. And the same should be done by brands. It also fits into your marketing strategy your customer service et cetera et cetera. [00:16:41.540] - Grace Yeah. So it's really more of a it's a broad thing. [00:16:43.850] - Hidde Exactly. That you and you have. You have to consider a lot of different elements of it exactly as is as is known of course and pricing it touches so many subjects. That's why it also makes it a very interesting topic for people to work in. [00:16:56.310] - Grace And what are some KPI is that people can use to measure the effectiveness of this strategy? [00:17:01.530] - Hidde It depends a bit on seasonality but you can always take year year analysis of your own brands. You can check the cannibalization so what if I change the price of this products. Does it hurt the reference price product. So that's one thing to look at but as a standard we always advise to take into account year on year revenue volume and margin next to that. You can do some quantitative analysis asking your consumers what what their price perception is currently. So yeah on a regular basis asking your consumers for feedback. I don't think that's a that's something bad. And you know take the price perception for that into account. [00:17:42.230] - Grace And so do you have any tips for it. So if somebody wants to just get started with this what would you what would be? [00:17:48.120] - Hidde Step 1 start simple with just a few products and get the process working and get some initial results in fast. Because if you want to start with too many products you'd get lost and maybe the implementation then doesn't work and you don't know why the implementation because there's so many products involved. [00:18:09.770] - Grace Would you recommend starting with your high runner products or late or long tail? [00:18:13.790] - Hidde I would say long tail because they're probably not priced correctly. So yeah my advice would also always be to start fast as every day in pricing that you're not on your ideal strategy is day loss often in revenue and margin. [00:18:31.490] - Grace Anything else that you want to communicate about reference pricing? [00:18:34.520] - Hidde Anyone interested in this reference pricing can contact us and we'll be happy to help you set this up. [00:18:42.170] - Grace Perfect and if they if anybody has questions they can just send you an email or Linkedin, right? [00:18:46.130] - Hidde Yeah. Drop me an email. That's perfectly fine. [00:18:49.060] - Grace Perfect. All right. Well thank you so much. This has been really helpful and enlightening. [00:18:56.550] - Grace Thanks again for listening to PricePoints. I really hope you enjoyed this interview with Hidde. If you'd like to learn more about reference pricing check out the blog titled How Reference Pricing Keeps Your Private Label Products Agile on our website. If you'd like to get in touch with Hidde, feel free to reach out to him at Hidde@Omniaretail.com or by LinkedIn. You can also reach out to me at the same channels and my email is grace@omniaretail.com all the contact details as well as the blog post link are in the show notes. In the meantime though I hope you have an excellent 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

Price Points Podcast EP 6: The Power of Customer Success

What is "Customer Success," and why is it so important to dynamic pricing? Omnia Vice President of Customer Success Haiko Krumm tells all in this episode of Price Points. [00:00:11.120] - Grace Hello. I'm going to Price...

What is "Customer Success," and why is it so important to dynamic pricing? Omnia Vice President of Customer Success Haiko Krumm tells all in this episode of Price Points. [00:00:11.120] - Grace Hello. I'm going 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 last time we posted I talked with our Product Manager Berend about what it takes to build a complete dynamic pricing platform from a technical perspective for this episode. I wanted to talk about dynamic pricing success from the other side of the equation the user base inside dynamic pricing can be a big organizational change and it creates a whole host of opportunities but it's also complex and it touches a lot of different areas within your organization. So how do you manage that change and ensure that you're getting the most out of the tool. I sat down with Haiko Krumm, our Vice President of Customer Success, to discuss how Omnia helps customers feel happy with their dynamic pricing I go began at Omnia about a year ago but he has a long history of working in the field of customer success. It's something he's truly passionate about and since he's joined we've made pretty amazing strides at Omnia. In this episode we talk a lot about what customer success means to him. The changes he's brought to Omnia and more. So sit back, relax, and enjoy this interview with Haiko. Thank you for meeting with me. Can you maybe introduce yourself a little bit and talk about who you are and what you do here. And yeah just your overall roll. [00:01:39.750] - Haiko Cool, will do so. My name is Haiko within Omnia I'm responsible for Customer and Partner Success. A bit myself first. I'm 41 years old, I live in Amsterdam, I have a son of eight and a wife. Love Amsterdam, won't ever leave it. And about Customer Success within Omnia I'm responsible for Customer and Partnership Success. To start off with Customer Success I think it's very important as we as a company sell in principle a product that's about pricing a marketing automation but the product itself doesn't make customers successful and doesn't directly deliver any value. So a Customer Success team is responsible to help our customers get the most out of our products and therewith achieve value and stay as a happy customer and become brand advocates. [00:02:36.410] - Haiko Thank you so much. [00:02:37.360] - Grace But this isn't a new role to you. You were Vice President of Customer Success at Insided, correct? [00:02:42.330] - Haiko Yeah that's correct. [00:02:43.150] - Grace Yeah. So one step before that before I was at InSided I had— I've been a Marketing Consultant which I loved because you see a lot of different companies and can help them out but there was also a little bit too passive for me because it's a lot about defining strategies, giving workshops and creating reports. But in the end you never know whether that really turns into value. So I thought I would like to be a little bit more active really making sure that that stuff happens. And next to that I also wanted to be a little bit more in an entrepreneurial environment. So by then that's now I have to think like nine or 10 years ago even I by coincidence came into contact with Robin where there's an online community company and I thought these communities make a lot of sense from a marketing and customer service perspective. And he was an entrepreneur so I thought let's just have a lunch with him and do some knowledge sharing. And during that lunch a lot about communities made sense to me but also Robin told me he actually wanted to pivot a business model from owning his own communities to facilitating those for larger companies. And that made a lot of sense to me. And after a couple of brainstorms he asked me what I would like to join. And actually that's immediately helped me to become more entrepreneurial of course. So basically I started off there creating the proposition as it wasn't there, creating sales material, websites. Did sales, got the first customers onboard. And then of course we promised a lot. And then we had to make sure that stuff really happened so I did project management, consultancy, account management, etc. During this journey I more and more saw that my passion is more on the customer side instead of the sales side, as you really build up a relationship not with a company only but also with people within the company. And my passion is really to make them successful. [00:04:47.230] - Grace Why is that a passion for you? [00:04:48.960] - Haiko Yeah, so what I really like is to build a long term relationship with uh with people and to really accomplish something. I mean sales is just the start of the journey and it's super important uh part of course but it's just a start. And I'd rather really build up a relationship and in a couple of years together look back say wow we we really accomplish this and it's a mutual benefit. I mean of course companies pay money for our services but if they do so with joy, that's the best situation I think we we can have. [00:05:21.490] - Grace So if you say you know you want dynamic pricing you're choosing between different companies why do you think customer success is so important to figuring out which company you want or you want to go with? [[00:05:30.940] - Haiko So the definition of customer success is that customers achieve their ever evolving value they want to get out of our products. So as said, the product by itself doesn't deliver any value and we can just deliver a platform for whichever retailer or brands but it won't do anything. So taking one step back and that's of course also my proficiency but I believe that customer success is crucial for each SaaS, software-a- a-service, you buy as yeah just having this platform won't help you out by itself. And I think it's especially for dynamic pricing crucial as dynamic pricing of course directly impacts your overall company results. And it touches upon many different departments finance to marketing and last but not least but not least it's really a complex matter and you really have to have a clear strategy on your pricing and be able to translate that into your pricing rules within Omnia. But that's only where the journey starts. After that you want to learn you want to use the insights you you get out of a platform because we have a lot of rich data and you have to turn it into insights and continuously optimize your strategy based on these insights. And yeah that's a lot more than just the platform by itself. So I really believe that customer success is crucial for for getting the most out of the dynamic pricing. [00:07:03.210] - Grace So do you feel like our dynamic pricing tool is sort of like a hammer and the customer success team is showing you how to actually use it? Or is maybe a better analogy is a power tool so maybe like a circular saw and then for instance showing you how to use it safely and how to actually get the most out of it right? [00:07:21.610] - Haiko Yeah I like that analogy. Thanks. I will use it more often and if I would think uh onwards in this uh philosophy then I would rather uh call it the toolkit. 00:07:32.850] - Grace A toolkit, yeah. [00:07:32.880] - Haiko With a lot of different uh possibilities. If you look at our platform it's pretty exciting what's possible with it. But indeed you have to understand what's to do with it. And first of all you have to have a plan, actually, of what you want to do because if you have a toolkit and you just start hammering nails into the walls that won't happen. But if you have an idea to actually build a house then you have to start to really think through that already and to map stuff out and then start working on it. And that's indeed exactly what Customer Success is about. So you actually automate the biggest part of your assortment continuously which is a quite a challenge. [00:08:05.070] - Grace And so how have you embedded this sort of philosophy into Omnia? So something that's been done since you first started here is we now have kind of core sections within Customer Success. I'm wondering if we can maybe talk a little bit about each of those. So you have Onboarding, Customer Success Management, Knowledge and Strategy, and Support and so you're responsible for all of that, correct? [00:08:27.450] - Haiko That's correct. So uh also nice to start in this order. Onboarding is actually the starting phase. So if a customer starts to use Omnia, we know this is super crucial period where the customer is excited but also gave us a lot of trust and has to learn everything still about a platform at least. So in this period of approximately two to three months we really deep dive into the tool and not only making sure that it's technically implemented but that's the as said strategies are really translated into pricing rules that the customers really understand how the tool works and are able to use it themselves instead of that we should be doing it for them. [00:09:17.880] - Grace So it's partially making making sure the customer feels comfortable with the tool before you really kind of let them do their own thing, right? [00:09:31.500] - Haiko Yeah exactly. So it's it's uh making sure it is really implemented and live. But also that it shows the first initial value and that customers indeed trust the tool and are able to independently work with it, correct. [00:09:47.870] - Grace Yeah. And so then the next part the next part of this process is customer success management right. Or is it knowledge and strategy. [00:09:55.340] - Haiko No. The. Yeah. That's a bit the the same but. So for if you look at a proactive process we start with the onboarding and after the Onboarding we move over to Customer Success Management. And Customer Success Management is about continuously checking, okay what is your objective with the tool? What are your strategies and what do we actually want to achieve in the upcoming year? And then do regular check ins whether that's indeed working or not. And also making sure that customers really know what is happening at Omnia, what is on our roadmap, what we have delivered, how they can use it. So that's the proactive contact we have to make sure that customers get the most out of the products. And it's not about only the the contact and relationship but it's also about really diving into the metrics we have of our customers and making sure that they're on the right way. [00:10:47.010] - Grace Okay. And then knowledge and strategy what's next. [00:10:50.950] - Haiko Yeah. So uh we have a lot of expertise on pricing and marketing and of course our own tool. And uh mostly that knowledge lies with uh with uh the consultants and of course all product management. And as we are as software as a service company we don't say want to do a lot of one on one consultancy because that's not really scalable and that's also not our business model to do by-the-hour consultancy. So that's why we tried to create more generic knowledge uh and share our expertise. And that's be done mostly by the consultants so they create a knowledge base with a lot of articles we create blogs. We do a lot offer analysis which we want to share with our customers so that all the customers benefit from the work that we do and indeed again are able to get the most out of their pricing and marketing. [00:11:47.080] - Grace And do you see customer communities as part of a future within knowledge and expertise? [00:11:51.240] - Haiko Yeah that's a that's a nice one of course that's my background within, within Insided and I definitely believe that that it can help and especially also because now we have a lot of expertise. But the more and more customers we get the customers in the end of course know even more than we do. And communities are a great way to capture that knowledge and share it among the customers and making it a total more interactive platform. So I definitely do believe that's in which phase of the company I don't know yet. [00:16:01.830] - Grace And does Omnia and let you do that? [00:12:23.730] - Grace Yeah. Yeah but I mean I do think it's pretty cool because like for example but we had a customer independently come up with something that we'd been thinking about for a while but they were actually testing it and their strategy is working. And so it would be cool for them to be able to share that more easily with other with other customers. [00:12:42.330] - Haiko Absolutely. And also a lot about, of course, our platform development. So both communicating what has been developed how you can use that and if customers have any questions they directly can do so and other customers also see these questions and answers but also on product feedback. What do you like uh what what would you see different in our platform and by voting you know which is the most important for customers. Instead of just one customer asking something and then you have to say no because hey it's not the most important but then it's super transparent and also insightful for us. [00:13:18.270] - Grace The last step in the process is customer support which is a little bit different, I understand, right, than Customer Success. So maybe you can talk about that. [00:20:08.170] - Grace Do you think it's worth it for enterprise companies to try and build their own dynamic pricing system? [[00:13:26.790] - Haiko So in principle Customer Success is more a proactive approach where we continually help our customers proactively. And customer support is more reactively. So if customers still needs helps on something, still has questions or indeed if something's going not the right way. If there are issues with imports exports then of course we still need somebody to help these customers out. We have our Product Specialist Jelmer there. So we also define it as a Product Specialist and not as a support agent because he's not just simply following scripts but he's really expertise guy on our platform and knows on some points even more on the platform compared to the Consultants or the Product Managers as he's continuously diving into the stuff that happens with our customers and is really making sure that customers get the most out of it again. [00:14:25.800] - Grace So how did you come up with these four different parts? [00:14:29.010] - Haiko Yeah. So as I a bit explained within Insided I moved into this Customer Success but that was still with a with a consultancy mindset really doing one on one consultancy helping each customer out but that's of course not scalable. And like five years ago I believe the Customer Success proficiency actually came up and that's still the same mindset making customers successful. But then in an efficient and scalable way more really with a structured process. [00:14:59.850] - Grace And that's the customer success proficiency? [00:15:01.740] - Haiko Exactly. And that that totally made sense to me. So I really dived into that gate side as a company SaaS company that really fueled this customer success movement. So I read a lot of books about it, joined conferences, follow each blog there is about this, but also I do a lot of one on one knowledge sharing with peers and I also facilitate a Customer Success a leadership Meetup like two to three times a year. So really to keep up with what is happening and also be able to translate that in actual actions and strategy and tactics we can use as Omnia. [00:15:43.650] - Grace Okay. I didn't know that about you. So how big is that event then, that Meetup that you host? [00:15:48.720] - Haiko And that's not too big. Actually uh because uh usually if you go to conferences you hear the showcases and how great everyone is doing. [00:15:48.720] - Haiko And that's not too big. Actually uh because uh usually if you go to conferences you hear the showcases and how great everyone is doing. But that's most of the times not the things you can learn from you. You learn from each other's challenges and falls and and more deep dive in setups. So that's why there's this meetup is only like I believe eight to 10 people. And we are really transparent there of what do we do and what is working what isn't working and each time we have a different [00:16:32.970] - Grace Yeah and I imagine it's probably also probably better rather than going to a conference once a year to act to have multiple touch points throughout the year. That's sort of the same thing here with our, we do EBRs multiple times a year. To make sure people are on track and they're getting the most out of the product and we don't wait for a catastrophe or for like a once a yearly review right. [00:16:54.930] - Haiko Absolutely and and also I think the difference is that conferences mostly are somebody presenting and learning from that's where both the EBRs as the meet ups are more interactive so that you actually can ask a debate about things. So getting some more deep learning instead of just scratching the surface. [00:17:18.060] - Grace So what makes Customer Success at Omnia different than at other organizations? [00:17:22.980] - Haiko Yeah I think uh that's based on the passion there already was within the company and the knowledge before I came. So Sander our CEO is really an expert on this matter. We have consultants said are really experts and so does these this expertise and already having the passion to really make our customers successful has been embedded in the company for for many years and I think what I tried to contribute to that is to make it more structured and scalable from now on. [00:17:58.950] - Grace What about partnerships. What role do partnerships play in customer success? [00:18:02.550] - Haiko Yeah that's a good question because we decided to make it the responsibility of partnerships also within the customer success teams who is actually customer and partner success. [00:18:13.960] - Grace Why did you decide to do that? [00:18:15.320] - Haiko Yeah. So it both is about the long term relationship and getting mutual value. So both our relationship with our customers as our relationship with our partners. And within Omnia we also defined partners and partnerships as really of strategical value. So first of all we of course have our marketing and pricing platform but it's fueled with competitive data and competitive data we get by our data partners or data partners so there are actually a crucial part of our proposition. And next to that we also have partnerships with for instance Microsoft, Google, a lot of strategy consultants. So we believe there's a lot of value in and in partnerships both for partners as for us as for the customers of course. And that's it's a pretty similar dynamic compared to customer success. We decided to have that in the same department. [00:19:15.960] - Grace Thank you for talking with me. If people want to get in touch with you what's the best way? [00:19:20.910] - Haiko They can always send me an email at haiko@omniaretail.com. I think that's the most easy way to do this. [00:19:27.030] - Grace And then also include a link to your LinkedIn. Perfect alright. Thanks Haiko. [00:19:31.810] - Haiko Thank you so much Grace. [00:19:40.440] - Grace Thanks for listening the price points. I hope you enjoyed this episode if you'd like to get in touch with Haiko feel free to send him a message. Haiko that's H a i k o and I'm your retail dot com or connect can be linked. I'll include both of those in the show notes along with my contact details as well. In the meantime now 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 HAIKO KRUMM: Email: haiko@omniaretail.com LinkedIn: Visit here TO CONTACT GRACE BALDWIN: Email: grace@omniaretail.com LinkedIn: Visit here

Price Points Podcast EP 5: Building vs. Buying a Dynamic Pricing Solution

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

Price Points Podcast EP 4: Maintaining Organizational Clarity

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

Price Points Podcast EP 3: Risks and Rewards in Dynamic Pricing

What are the risks and rewards of dynamic pricing, and how can you tip the scales towards reward? Travis Rice explains all in this episode of Price Points. [00:00:11.590] - Grace Hello and welcome to price points...

What are the risks and rewards of dynamic pricing, and how can you tip the scales towards reward? Travis Rice explains all in this episode of Price Points. [00:00:11.590] - Grace Hello and welcome to price points episode three. I'm your host Grace Baldwin. And today we're talking about the risks and rewards of dynamic pricing. Risk aversion falls on a spectrum. Some people are naturally more tolerant of risks but others try to avoid it like the plague. No matter where you personally fall on the spectrum though when it comes to big changes at work are warning bells start to ring. It's understandable. Tools like dynamic pricing do affect your job pretty dramatically and any big changes the way we work are enough to leave us with sweaty palms and an elevated heart rate. But is the perceived risk around dynamic pricing actually valid is dynamic pricing really that big of risk in the pursuit of this answer. I sat down with Travis Rice one of our customer success managers working with our enterprise customers to make sure they get the most out of Omnia and by conducting business reviews giving helpful tips and tricks and updates on where the product is going. Just from our chat it's pretty obvious that he understands the resistance to dynamic pricing deeply but that he will also talk us through that resistance until you feel totally comfortable with the tool. Travis and I talked at length about the fears and risks around dynamic pricing and he gave me a lot of reasons why the practice is actually less risky than you might imagine. So sit back and relax and enjoy this interview with Travis Rice. Welcome Travis. Thank you for sitting down with me. Can you tell me a little bit about yourself and what you do here. [00:01:45.800] - Travis So thanks Grace. Name's Travis. I'm a customer success manager here at Omnia. My main responsibility is to help customers achieve value through our platform to really understand what they can do strategically and commercially with Omnia for their pricing strategies. So when it comes to our team as a whole I work directly with our consulting team. I work directly with our product team and many internal facets to really help us further understand what do customers need. What can we further iterate in our product to help them again get the most value moving forward. [00:02:08.730] - Grace So today we want to talk a little bit more about fear and dynamic pricing in the risk when it comes to dynamic pricing. So what are people afraid of when they think about dynamic pricing. I mean do you think that there is a resistance to dynamic pricing and why. [00:02:31.970] - Travis Actually I do and I have seen this as a reoccurring trend especially a lot of the new customers that we've been onboarding even some of the prospects. So. I actually think it's funny I come from a world of the background of marketing and this is what marketing went through five six years ago where a lot of the tasks were being done manually. A lot of the work was being done manually especially on the agency side and there was a huge resistance to automation there there's a huge resistance to the marketing automation whether it's you know big email flows or the agency side in the performance side of saying Okay well we don't want to give our bidding over to Google right. And so at that time it wasn't necessarily more effective but today it is. So I see that very similarly here in the retail space in that I believe a lot of customers and in their executives are saying we're really a little resistant to moving towards a dynamic pricing model. We don't necessarily know how this is going to be advantageous for us or on the other side. We do know that this is something we want to move towards but we're scared in the process. We don't know how this is going to look both the change internally and the change for what our business outcome is going to be. [00:03:46.970] - Grace Why do you think people are resistant to it? Do you think there's a fear of a lack of control or a lack of oversight in it? Do you think that there's some sort of a fear within the automation itself that makes people a little nervous about it? [00:03:59.700] - Travis Yeah I mean I think people are inherently resistant to change. And I think when you have a process and whether it's the most efficient or not it's something that you're comfortable with and it's something that you know when you're changing that process it can feel like it's a little bit of a risk. Something like Omnia it's a platform right. It's not going to come in and tell you what your commercial strategy should be what your pricing rules should be. But I do think that it does force people to really understand and evaluate that themselves. You can't use Omnia if you don't understand what pricing rules you want to put in place what those pricing rules are eventually moving towards in terms of your overall commercial strategy. And so I think that a lot of again that maybe that fear of that lack of control is valid right. I think that you're right to feel that way any time you implement a new system it does change your internal workflows and it does have an impact on your bottom line. But the thing that I would also encourage people to look at is what's the opportunity if we do change to this how much better can our internal workflows be how much more depth of data is going to be available to our pricing team. What can we then get insights from in terms of okay. We know that we're moving dynamically with the market because a lot of these industries these days that you wouldn't even think tires fashion. I mean obviously electronics is an obvious one but a lot of these industries have already moved to denim and pricing. And so if you're not in your resistance to it you're not necessarily saying well I don't want to be the first one to be moving here you will your competitors are. You also need to understand that there is a lot of opportunity cost to resisting this change and giving into that fear. [[00:05:35.270] - Grace How big of a change is Omnia? [00:05:37.250] - Travis I think it can be a big change. I think it can be a big positive change too. So when you look at Omnia as a platform again it does not work if you don't have a commercial strategy laid out. If you don't have pricing rules laid out if you don't know what you want to achieve with Omnia. It's simply a tool and a tool allow companies to really transform the way that they do pricing let's say internal pricing team you're spending x amount of hours on actual execution and putting in this strategy week in and week out manually looking at prices manually making changes and think if you're able to put that number of hours in two more strategy. I think that is transformational in and of itself. When you look at the bottom lines knowing that okay the prices we're putting out there to the marketing channels that they're going towards it's going to impact the marketing department. It's going to impact pricing. It's going to impact purchasing. We have a lot of insights in reports that can be taken in by the purchasing teams. So going through and getting better negotiations from the suppliers and from the brands themselves. So I mean I think when you're looking at that whole organization there is a ton of opportunity that's available. It's just depends do you want to give in to the fear of hey this is a brand new process this is a brand new product. It's a platform I don't quite understand yet. Or do you want to say this is a great opportunity for me to learn something new and for me to make our organization competitive if not more competitive in the market [00:06:58.580] - Grace So the fears behind dynamic pricing I think that there's a lot of fear. Like when we flip the switch what happens next. And there's a fear of OK are we going to have a race to the bottom. Are we going to understand what's happening. Do these fears have any validity? [00:07:12.770] - Travis Yeah I think they do hold some validity and I do understand where they come from. You know I think the first the first thought that a lot of directors and executives have about dynamic pricing and what the impact will be is. OK. The algorithm is just going to make us the cheapest and then the competitors the cheapest and then where the cheapest and we end up having this race towards the bottom. It doesn't work that way. You know Omnia takes into account a lot of business rules. It takes into account minimum acceptable margins and there's certain fail safes that are actually in place. So I do think that there are inherently like any new system any ERP system any marketing system any financial system. There are inherent risks if we just said here's a platform. Go ahead and use it. Right but Omnia has a team of consultants. We have an onboarding team and we have a customer success team that I'm a part of that really teams up with each and every one of our customers to make sure that they understand what are the safety nets that in rules that we have to be putting in place. What are the types of data that we need to take into account. How do we ensure that we have the proper integrations. So I do. I do think if you just said more generally is there a risk to dynamic pricing maybe. How do we mitigate those risks and do oftentimes do we almost eliminate them. Yes. And so I do think that at the end of the day moving towards dynamic pricing is a very low risk high reward opportunity for many many companies. [00:08:43.460] - Grace How can companies tip that balance of risk and reward more towards reward? So we've already mentioned really understanding kind of what you're doing finding the right team. Is there anything else really that helps make this more reward than risk. [[00:08:59.720] - Travis Yeah I think the first it comes comes back to you need to be realistic about where your industry is moving towards. There is going to be opportunity cost with not moving towards dynamic pricing. If you're still doing things manually internally and changing your prices the market's likely changing if not every day multiple times a day. So I do think that that's a big aspect to take into account. But the other thing is if you want to get more reward out of this than risk again this is an opportunity to really define what sort of pricing rules do we want in place what is how does our pricing impact our overall commercial strategy and I do think that I've been surprised at some of the conversations I even I've had my time at Omnia with customers that these are the types of conversations that can go six, 12 maybe even 24 months without being re-evaluated. Are you continuing to re-evaluate your strategy. Are you continuing to look back and say do we need to tweak some of our pricing rules. Do we need to get more granular with specific brands or categories in some companies don't. Some companies are really good at that and those are the ones that are getting an advantage in the field. So the ones who are gonna get the rewards. Are we going back in and are we using Omnia for getting more granular with our pricing strategies and the reporting that we get back from the insights that we take. Are we then going back and re-evaluating as an organization or as a pricing team. Okay well now we had the first iteration how do we do better the next time how do we continue to iterate. And that's really the process that most people are going to see the most value from. [00:10:39.110] - Grace Do you think that that the fact that you're automating so much of the previous manual labor now gives you time to go over those insights and actually point a little bit better and and iterate and test and figure out what works and what doesn't. [00:10:51.320] - Travis Yeah exactly. I think that hits the nail on the head. You know us as humans we only have a certain amount of hours in our week some are willing to put more towards worker or you know more towards other things. But at the end of the day we only have a certain amount of time that we're going to be able to invest in our work. The more that we can allocate that to strategy the more that we can really move that towards collaborating with our team rather than the actual execution of work in the manual processes. And you look at that over time the aggregate of that time saving the aggregate of that time going towards areas that are going to more effectively impact the bottom line I think is really going to increase the reward people will see from using dynamic pricing especially with a tool like on how do you think people can get comfortable with dynamic pricing from the start. [00:09:45.770] - Grace So what are some of the different ways brands can differentiate their assortment across different channels? [00:11:38.750] - Grace So you know I think a lot of people maybe understand that dynamic pricing is important and maybe at the point where they know that they need to find a solution but they're still not totally comfortable with it. Do you have any advice on how to actually just feel more comfortable with the idea of dynamic pricing. [00:11:56.630] - Travis Yeah absolutely. I mean first thing it's a you know self plug here but I would recommend reaching out to Omnia. We have a team of consultants we have a team of customer success managers like myself who are always willing to go through the process. I mean I thoroughly enjoy the conversations I have where there's question question question question because that's our goal we want to make you feel comfortable with not only the transition but the process and what the ultimate outcome could look like for you. It's not for us to define what your strategy should be or could be or what rules you have to put in place that's for you to find out that's for you to really determine internally you know what is important to us as an organization where do we want our focus to be. But if you're feeling uncomfortable if you're feeling a call we don't know the first steps or here's a platform that we're not quite as comfortable. And I actually liked your question before about how do we know if we foot the switch that this isn't going to go wrong. Do you think that at the same time you look at the opportunity that's available to you you also need to be realistic in that this does impact organizations and it does impact jobs and I fully understand the hesitancy to move a process you know over to a more automated system. The great thing that on our team provides is again going through the actual tangible fail safes that are in place what sort of catch all pricing rules you should implement so that things aren't missed. And the insights that you can get from it. So we're gonna be able to then kind of coach you through that whole process. And the last thing I'll say on this is it doesn't have to be a switch that happens right away. I think just like anything else every other industry the idea is hey we're gonna get this up and implemented and all of a sudden in three months or in six months everything's changed. This is a process and it should continue to always be a process just like any other thing in business when you're rolling out a new product. You realize okay there's certain iterations we need to have or maybe we change the messaging on our go to market for this for this product. It's the same thing with your internal pricing right. So we're gonna start and maybe some companies start a little bit more conservatively and say that's OK you if you want to get used to the system you want to put in place the first few rules that are really going to start to impact it within a certain you know within a certain margin that's perfectly acceptable and then start to get more granular from there then start to iterate from there. Not to say that the simplicity almost isn't more effective sometimes it can be sometimes these really granular plans right off the bat they're just too complex to understand and our system gives a really transparent way to see what pricing rules are impacting the final price. How did it get. How did the system come to that so that your pricing team can really say okay I'm comfortable with how Omnia is contributing to it. I understand how they made the pricing changes and I agree with them. So again I think it is. I see as a process I don't see this as a switch that you know we go from before and after. And then it set it and forget it and I don't believe there is any really effective system that does do that. So I wouldn't view pricing the same way either its foundation piece in The it's all based on what it again come back to you what is your commercial strategy what are the pricing rules that you believe are gonna work best or have worked best for you. And then how do we start to automate that once you get the insights back. How do we start to iterate and get better and better and better. [00:15:12.080] - Grace How quickly can someone see value and see the reward of dynamic pricing? 00:15:17.260] - Travis Yeah it's a good question and I think it again it's going to come back to how you wanted to find value are you going to be seeing in your bottom line week one maybe maybe not. Are you going to be able to start seeing process improvements once we do turn on on year once you do start to integrate that in with your internal workflows. Yes you're going to be able to see right away how is on your making these pricing decisions. Is it changing our pricing. Is it automated through my whole process at least as far as is we want to allow to begin with. So yes from day one from a process standpoint the value is going to be instant. Now how does that value translate into the bottom line to increasing margins to increasing revenue. That's again going to be largely dependent on did we have the right pricing rules in place or do we need to re-evaluate those pricing rules to be more effective moving forward again. I wouldn't say Omnia is not something where you just set a specific target and say hey like in marketing I want to you know 3000 percent return on my ad spend Google go ahead and do this Omnia is not necessarily translated in that way again I think the value from the bottom line is going to be how effective is my commercial strategy in my realistic about where we're at in the market and what sort of pricing rules do I want to integrate into that commercial gee how effective are those. So the two pieces that I see is the internal value side. That's instant and I will continue to grow as people get more comfortable with our platform. The revenue the margin and the bottom line business side that happens over time. And I think that's just like any other system. Again I'm all about iteration. I'm all about the process but it can and I think again you look at quarter after quarter after quarter that's when things get really interesting because the little iterations and the better that we get each quarter. Now when you start to look at year over year I think that's when things can get really fun for looking at the bottom line there. [00:17:11.970] - Grace Well thank you for sitting with me. If people want to get in touch with you. What's the best way for them to contact you. [00:17:18.160] - Travis Yeah if anyone wants to reach out. My email is Travis at Omnia retail dot com. [00:17:23.130] - Grace Can people also find you on LinkedIn? [00:17:24.900] - Travis Yeah of course. [00:17:26.500] - Grace Okay cool, I'll link I'll link that in the show notes. [00:17:28.900] - Travis All right sounds good. Thank you Grace. [00:17:37.220] - Grace Thanks for listening to Price points. I hope you enjoyed the interview with Travis if you'd like to reach out to him. Feel free to email him at Travis at the retail dot com or on LinkedIn. As always I concluded his contact info in the show notes so you can easily access it if you'd like to get in touch with me. You can also send me an email at Grace at a retail dot com or on LinkedIn and you can also find that information in the show notes as well. I would love it if you reached out and told me what you think of the show, your ideas for future topics or how I can just make it better. 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: travis@omniaretail.com LinkedIn: Visit here TO CONTACT GRACE BALDWIN: Email: grace@omniaretail.com LinkedIn: Visit here

Price Points Podcast EP 2: Why Should Brands Differentiate Their Assortments

How important is a brand's assortment to its D2C strategy? In this interview with Hidde Roeloffs Valk from Omnia Retail, we dive into assortments and uncover how they are an essential tool in a modern e-commerce...

How important is a brand's assortment to its D2C strategy? In this interview with Hidde Roeloffs Valk from Omnia Retail, we dive into assortments and uncover how they are an essential tool in a modern e-commerce strategy. [00:00:10.580] - Grace Hello and welcome to price points by Omnia Retail. I'm your host Grace Baldwin. And today we're continuing our conversation about brands in the direct to consumer, also known as D2C, channel. More and more brands are making the move DTC in order to gather more data, build better relationships with consumers, and ultimately earn more sales. But this move presents an issue to brands' relationships with their biggest customers: retailers. By moving direct-to-consumer brands can quickly become direct competitors to the retailers who also buy and sell their products. So how do brands avoid this channel conflict.? In an interview with our partner A.T. Kearney a few weeks ago, which I'll link in the show notes, Jean-Paul and Roger told us that a differentiated assortment was one of the key things for brands to successfully move direct consumer. But what does that mean, and how do brands actually go about doing that? To answer that, I asked Hidde-Roeloffs Valk, one of our consultants here at Omnia. Hidde has been with Omnia for two and a half years. But before he worked as a consultant at the leading pricing consultancy Simon Kucher and Partners and has a master's degree in finance from the University of Amsterdam. Hidde loves pricing and knows everything there is to know about it and would happily talk for hours about any aspect of the practice. It's because of him that I started on this whole journey about brands in the direct to consumer market. So without further ado let's dive in how brands can differentiate their assortments as a way to voice halacha. Please welcome Hidde Roeloffs Valk. [00:00:10.580] - Grace So I think to start would you mind introducing yourself a little bit and your background. [00:01:39.660] - Hidde Yeah I'm Hidde a Solution Consultant for already two and a half years now here at Omnia. Before it is I was at Simon Kucher, a strategy consultancy with expertise and pricing where I did projects for the German brand Miele for instance the paint manufacturer AkzoNobel. So I took a particular interest in consumer goods and retail so which is why I also joined Omnia where I help retailers and brands improving our pricing and marketing with our software. [00:02:08.730] - Grace So this month we're talking about brands and how they're starting to move to direct to consumer and more specifically we wanted to talk about why their assortments and should brands differentiate their assortments and why they should. So why should brands differentiate their direct to consumer assortments if they're going to make this move is they're going to reason why they should make that difference. [00:02:27.510] - Hidde There's a few reasons and most of times they would like to improve the brand experience. They can manage more of the brand experience by differentiating their assortment across these channels. Of course sales is always important and they can get increased to sales obviously because they're increasing the amount of ask you use. They're eventually selling. Another thing that's really important for basically all companies nowadays of course is get data to the retailers they often do not get any or some sales data. But selling directly consumer they can get way more data they can see on their website which products are people interested in maybe not buying or are buying. They just have way more information they can manage on and maybe improved our products even more. Not only for themselves but also for their retailer. So it's also beneficial for the retailers in the end by improving that. [00:03:19.920] - Grace So it's less about sales and more about experience in product innovation not always about sales. [00:03:26.310] - Hidde It's always about sales. So yeah but it's a way to to capture more sales. [00:03:32.310] - Grace And so what are some examples of companies that are already differentiating their assortments? [00:03:36.780] - Hidde The biggest one I would say nowadays is Nike. It's a huge example of mass personalization where consumers can in fact make their own product. True easy to use website. And they have some great manufacturing process for that to easily make those it only takes two weeks to get shoes in your colors and your style. It's pretty cool. The prices are a bit higher of course but there's just a lot of margin to capture there. There are these these water bottles you see every day in the office which can can personalize. So it makes it easier to recognize for people so there's a lot of there's a feature benefit for people there. Otherwise everyone has the same color and you just be confusing drinking other people's water bottles so those are two two examples. But there's also another example where brands make unique SKUs. That's one thing I saw at Miele. They may make for specific retailers or maybe for one large retailer they make a special product special SKU where maybe one feature is added or the color is a bit different that people might like so that this retailer has a unique EAN code and the product is less matchable and it can increase their sales and their relationship with these retailers. So that's what we call a different kind of differentiation strategy. So on the one hand with Nike mass personalization which is really the consumer level and on all the side you have the uniqueSKUs for a specific channel or specific retailer which is not present personalized but different in some way. Yeah. [00:05:17.550] - Grace So yeah. What is the benefit actually from creating a differentiated assortment if you're going direct to consumer? Is it like how does it affect the relationship with the retailers. I'm thinking about the shoes for example. Why would Nike want to have to have something different that you can buy directly for Nike versus something you can buy at every at any given retailer that also carries Nike? [00:05:41.190] - Hidde So in terms of Nike it would mostly be building a relationship with consumers which they didn't previously have. Let's say Nike used to sell a the retailers they had no way to build a relationship with these consumers by now having a unique product. They got all this data they can send them emails they can manage their brand experience more and pull them directly to their website and also the margin is of course way higher if they sell directly to these consumers. So that kind of change is also with the unique SKUs. It's mostly about bettering their relationship with the retailer as that unique SKU is sold nowhere. So they have some benefit and they can incentivize certain consumers to get to that retailer so the retaile'rs happy also and they probably won't sell that unique SKU directly. So that's a channel conflict you might have. So you need to manage that correctly and that's where a lot of consultants coming also. [00:06:44.150] - Grace So are there any categories where differentiation won't be a good strategy? [00:06:48.620] - Hidde Well products where it's hard to differentiate as they're substitute products basically. So there's just no way to make it more unique. Shoes of course. It's very personal with laundry machines. You can easily cut down on features and that kind of stuff with razor blades. Yeah you can. You just need to give the best razor blade as otherwise. And other brands will pick up your slack. So you just need to give the best one. Also they're fast selling. So yeah use it one time twice and throw it away so people don't really care about color and anything so so there's there's not a lot of features where you can differentiate basically. So that would be mostly hardware and FMCG, but food for instance in FMCG you can differentiate and do it like the laundry machine. We're talking about you can have specific flavors of Coca-Cola for instance for a specific retailer where you can do as a brand by giving a unique flavor to a retailer from a certain product you have is really give a token of appreciation you have a good relationship with then you can improve it more and more by giving these unique products so that consumers will go towards that retailer because they have this particular flavor. So with food it's more easily doable give them some special test some new flavor with them as the first ones and maybe role that out afterwards towards other retailers or maybe you have a unique contract with them for this flavor. So that's what you see sometimes with Coca-Cola for instance. [00:08:21.860] - Grace So going back to the razors example again the differentiation there wouldn't necessarily be in your assortment it would be more in your branding and your kind of or your service so the differentiation would be in your service not necessarily the product. [00:08:35.780] - Hidde Yeah like the Dollar Shave Club. Yeah. For instance. Yeah. That would be a direct to consumer service. Philips have also done it with basically leasing a electronic razor for women which was a was a great success. So these ranges were high in costs to buy a lot of women one to buy them it was really premium razor so they figured out if we do it on a monthly basis like software as a service we just use a product as a service as they asked I don't know something like 10 euros a month and they could just replace it if it break down and whatever and after a certain amount of time it was just yours. So it is enabled a lot of people that were not willing to pay it but were willing to buy it or very interested to buy this product finally and it increased the sales for this product more enormously of course and they made much more profit because they skipped the retailer in the end. But at the same time retailers were happy but because there were not cutting into their group of consumers because they were hitting a different target group which had less money to spend but we're willing to buy it and they wouldn't normally buy through to retailers. So both types were happy. [00:09:45.770] - Grace So what are some of the different ways brands can differentiate their assortment across different channels? [00:09:52.580] - Hidde So as we talked about this mass personalization that's that's one way of selling directly to consumers. I think that's one. Second was the unique products. And third one is maybe a different service offering so selling on a monthly basis instead of one huge thing and having some unique customer service or unique brand experience where people can maybe have additional features over the air maybe some software updates which they can pay for. Those are different ways that brands can differentiate across these different channels and sometimes in collaboration with with the retailer of course. So in-store personalization or special customer experience through the store a new product release where sort of retailer stocked with the product and other retailers get the product later for instance is maybe a time-based unique SKU. There's all different ways to manage relationships with both the retailers and the consumers at the same time [00:10:54.070] - Grace Can price be a differentiator for brands? [00:10:57.410] - Hidde So price really important topic here at the same time the brand should should set a price from the recommended retail price towards their own selling price which might be the same might not be the same. And at the same time the retailer needs to set a price for their in their stores online. They might differ might not differ. So there needs to be some way for brands to manage that and price is always relative, products are highly comparable nowadays some unique products might not be but always in some way comparable. And price is always transparent in the retail market nowadays so consumers will always look up the best price or mostly look for the best price and will always compare products versus other products or substitutes. TV for instance. Yeah that might differ with a few features and it's important to know which feature is valued by certain consumer. Anyways the price can be viewed in two ways. Either you will compare it with a retailer as a brand, so I'm Samsung and I might compare my prices of my direct to consumer channel with MediaMarkt for instance. Or I'm Samsung and I'm comparing my price or setting my price towards or in relation with another brand such as LG. So I might say Oh I'm always 10 percent under L.G. and I would differentiate on that in the end. It's a way to increase your sales. It's not the only way but it can definitely help. Let's say if you're selling directly to consumers your retailers are also your competitors but also your clients so need to manage that very well obviously. And yeah for now it can harm your price perception but it can also benefit your pride perception if managed correctly and it also has a lot of things to do obviously with your supplier conditions which is not a topic I will dive into this month. [00:12:57.800] - Grace So it's really more about using price but using it and like thinking about it very cautiously and using it strategically rather than just trying to price yourself will be the lowest price in the market? [00:13:10.670] - Hidde I would say it's it's not a differentiator but it's a it should be a fair price. It shouldn't make you different compared to the retailers but it can make you different compared to other brands. It's more about having a fair price to relative to these to these retailers like it's um it's a checkbox for consumers. [00:13:34.830] - Grace So it's like an anchor point. [00:13:36.650] - Hidde It's definitely an anchor point for the whole retail market. So what can happen is your prices say I'm lowing my prices as a brand, might be that triggers a price decrease over the whole market. So it's definitely an anchor point. It's sometimes always the highest price in the market that that's available and as a retailer if you're above the brand then you won't sell anything off easily. And compared to these other brands it can be a differentiator. Definitely. If your TV is of a higher quality and all also a better price and it's a huge differentiator. But if your TV is for instance same quality and a higher price then you haven't differentiated and doesn't make sense. That's where the comparing towards other brands really is really important. You need to always have this sanity check. Like is my value of the product in line with the price towards other products of other brands on the market on the market. Yes. [00:14:39.770] - Grace So that's a good that's a good transition into dynamic pricing. [00:14:43.040] - Hidde So how can dynamic pricing dynamic pricing isn't a differentiator per say it's it's it's a tool it's an enabler to manage these prices and the price perception that comes with it in an automated way based on large amounts of data. So again the data of both the retailers and other brands can fit into the system and uses all of your strategy to to manage it is thereby saving quite some hours making decisions or in an automated way. That really helps so you can use both your resources internally to focus on other stuff. So to ask that brand experience such as analyzing data and figuring out where to improve that assortment we were talking about. So in the end it's it's really an important tool to manage all this to enable you to have an automated way in setting the price based on so much data [00:15:39.880] - Grace So dynamic pricing can also help brands avoid market collisions? [00:15:43.430] - Hidde Yeah definitely. For instance it can quickly pick up when the price is decreasing in overall market and you might be the one that set off that decrease. And that way you can always increase the price again to get the over market up. That's one way to look at it but also managing stock for instance that would have been done by hand and these algorithms could pick up when you were having trouble with your stock and have an automated way of managing the price for a troublesome stock for instance. [00:16:13.730] - Grace Well thank you for chatting with me about assortments. If people have questions how can they get in touch with you. [00:16:19.460] - Hidde People could reach me via my email hidde at omnia retail dot com or connect with me via LinkedIn and then send me a message. [00:16:27.820] - Grace Perfect and I'll include all of that in the show notes. So thank you. [00:16:31.370] - Hidde Thank you. [00:16:37.040] - Grace Thanks again for listening to the second episode of price points. I hope you enjoyed it as much as I did. If you'd like to get in touch with him. You can email him at hidde at Omnia Retail dot com or visit his LinkedIn profile which I've linked to the show notes. As always if you're a retailer or brand and want to try dynamic pricing free for two weeks with your feeds you can connect with us here on our website or by calling +31 0 85 208 3140. Finally if you'd like the show let us know. Send me an email at Grace at Omnia Retail dot com and let me know what you thought or if you have any suggestions for the future. In the meantime though 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 HIDDE ROELOFFS VALK: Email: hidde@omniaretail.com LinkedIn: Visit here TO CONTACT GRACE BALDWIN: Email: grace@omniaretail.com LinkedIn: Visit here

Price Points Podcast EP 1: What Do Brands Need for a successful D2C Strategy?

What do brands need for a successful D2C strategy? Learn more in this interview with Jasper Wiercx, Solutions Consultant at Omnia Retail What are the benefits of brands going direct to consumer, and how can they set...

What do brands need for a successful D2C strategy? Learn more in this interview with Jasper Wiercx, Solutions Consultant at Omnia Retail What are the benefits of brands going direct to consumer, and how can they set themselves up for success in this new channel? Jasper Wiercx from Omnia Retail answers all your questions and more in this week's episode of Price Points. AUTOMATICALLY GENERATED SCRIPT: Hello and welcome to Price Points, the new podcast about all things pricing by Omnia Retail. My name is Grace, and I'm your host. And this month, we're focusing on "brands and the direct-to-consumer, also known as the D2C, arena," and exploring why more brands are entering the direct to consumer market, as well as what they need to succeed in this sphere. To start learning more about this, I spoke with Jasper Wiercx, one of our solutions consultants here at Omnia and our in-house guy for brands and dynamic pricing. Jasper is our newest addition the Omnia consulting team, but he has a long history of consulting. Before Omnia he worked as a strategy consultant at Deloitte for a few years, and before that he got his Masters in Business Economics from the University of Amsterdam. He's laid back and not one to waste words, opting instead to offer insightful and articulate words of wisdom every time he speaks. I sat down with Jasper to talk about what exactly brands need before going direct to consumer, covering everything from why a brand would want to go direct-to-consumer, what the benefits of a D2C channel are, how to avoid channel conflict, and more. So without further ado, let’s dive right in and hear more from Jasper Wiercx. Grace: Cool alright so do you wanna maybe introduce yourself a little bit? Jasper: Yeah so I am Jasper Wiercx. I am a solutions consultant at Omnia. In that role I translate commercial strategies into our software to apply dynamic pricing. Other than that I've been a strategy consultant for Deloitte and now I am primarily focusing on the D2C capability development of brands to serve their direct to consumer channel. Grace: And so how did you get into the direct-to-consumer channel? Like is it something that you had done before and that you brought that experience to Omnia or is it something that you've kind of taken on here at Omnia? Jasper: So I've taken up the role here at Omnia primarily because I do find it very interesting topic because you can see a shift is going on in the marketplace, in a sense, where it’s is easy to connect with your consumers and to sell to them directly given all the developments on the Internet and the did the capability of e-commerce. While traditionally would be more to put in the retailers actually the dependency is lower. Grace: So what are some of the benefits of brands going direct to consumer? Jasper: Yeah I am so I think benefits is actually really important and that I think there's three primary benefits. So first of all is all about that you are in direct contact with the end-user. So that's very good for your relationship and you can gather a lot of data on those end consumers that will ultimately help and give you feedback to increase your brand loyalty. You’ll understand better what a consumer for thinks of your brands and also product feedback of course. And you can link that back, is it actually is the brand that I want to have in the market or do I need to steer a little. And ultimately based on that feedback loop you can improve the customer experience from end to end as a brand. So not limited to your own direct to consumer channel but it also applies of course across your different other channels because it's just an improvement of your brands and your products in that sense. So I think that's the most important reason why you should assess how you can Grace: Get into touch with your consumers? Jasper: Yeah get in to touch with consumers and gather the data yeah Grace: And so it isn't it's mostly because of the Internet and the rise of e-commerce that Jasper: Yeah I think it's like it is the trend so as always I think I personally always believe trends are here to stay and it’s a signal of where the world is going to but it also applies to direct to consumer. so if initially if you could see how easy it is even for start ups and small business to directly sell to consumers via Instagram or via e-commerce and via Shopify platforms that essentially that also applies to larger brands of course that the ease of reaching those consumers is just as easily. However the entire the dependencies across your organization is more complex of course. Grace: What do you mean by that? What do you mean by the dependencies? Jasper: So if you make a comparison from a really small business that doesn't have that many dependencies in place as other relationships to care for of course a widespread and renowned brand has already been serving the consumer for decades probably and in the traditional traditional model where they were manufacturers and supplied retailers whom sell it to the consumer is something of course it has developed in a very unique relationship between the retailer and the brands and that's those are the dependencies that you need to be aware of and of course which you will influence if you directly sell to consumers was yours as a brand yourself. Grace: Yeah makes sense, it'll affect your relationship with your retailers, yeah Jasper: Yeah exactly. Grace: And so is a strategy important then for brands that are then moving direct to consumer? Jasper: So next to like the relationship with the retail of course, your relationship with the consumer will also differ if you will serve them directly. I think those two are quite a key in this in his area. And first of all why do you need the strategy as a brand for going direct to consumer? So a strategy my from my point of view is all about a certain choices that you make in order to drive profitable growth and that includes so what are my goals and aspirations but also where do we want to achieve this is and where do want to play but also how do we want to win those markets and in order to win what do we need to create an organization to be able to win? Grace: so the strategy involves goalsetting tool setting, too Jasper: Goal setting, but also the execution of the goals. so also how do I set up my this is the goal, how do I eventually set up my organization to achieve that goal and that includes so do I want to be active in the consumer markets directly. but also if that's my choice to directly serve the consumers do I want to service via retailers or do I want to serve directly via e-commerce? but essentially it's a about how will I win in comparison to my brand competitors and that develops into the sense of what type of capabilities do I need in order to achieve that strategy or that vision I would say. Grace: And so what are some of the capabilities that you think are important then the people need, in a more broad sense? Jasper: So the capability to the organization would need is first of all understand how your channel strategy is set up. So you'll set up a channel strategy because you think that it is the best way to serve those markets that you focus on. So not limited to only to, for instance, the consumer market, but all your markert that you're serving. if we look at the consumer markets, what capabilities do I need in order to achieve that is to achieve the channel strategy? and that’s of course the balancing of the channels across. so you want to limit your cannibalization of course, your cross-channel cannibalization which is important, you want to do you want to improve and optimize your brand perspective from a consumer point of view but also you don't want to risk your relationship with your primary retailers and strategic retailers because that will ultimately harm your sales assuming they still have 90% of your sales of course. Grace: And so for most brands is it in something like retailers are 90% of their sales and they're introducing the direct to consumer market to expand that? Jasper: Yes I think so I think traditionally the most renowned brands still a majority of the sales are driven by large retailers and or marketplace. But how different brands are now moving into the direct to consumer space is of course different dependent on your product or dependent on how you want to have your relationship with your consumer Grace: So what does a strategy look like? so if you're selling razors or shoes that sort of strategy look like versus a different type of product Jasper: Of course it differs quite broadly in between different types of goods that you have so let's take the easy example of the food industry right now and it's still not even that's adopted by the consumer and we can see is more more in recent years that you buy your groceries online the development is very much going on while more of like more computers or IT is already widely purchased online of course. secondly so it's all about how is the consumer market has e-commerce already been adopted by it considering the industry you’re operating in? or also show what is the best way to serve my consumer given if you would say razors or shoes and like maintenance is less important for those FMCG products while if you look at bikes or cars of course maintenance is really important and therefore your retailer or dealer network is even more because you've got those maintenance spots your consumer can go back to. Grace: So if you're an auto parts brand considering going direct to consumer would you focus more on your relationship with your retailers because they might be the ones that are providing those services rather than trying to find a way directly to the consumers? Jasper: Yeah I think so, so I guess it would. So initially you want to be in control of your own brand that might be more applicable to full-on cars, instead of car parts but if you were cars you might just have some experience centers in place to have a good brand in place where people can serve for you well, and you could potentially also purchase a car from there. But essentially you're dealer network is important because your dealer is closer to your consumers in that region and so of course I do think that’s a difference because the services that you provide to a consumer is also different because a fast-moving consumer goods you just receive on your doorstep, you don’t require anything else until it’s empty or has been depleted while maintenance is of course something completely different. so if you have a bike you want to have a you want to purchase the bike at the dealer which will also help you maintain it if you also have any problems Grace: So what about a multi channel brand strategy? so how does that the brand strategy and a pricing strategy relate to each other in this new kind of arena? Jasper: yeah this of course a very interesting topic in the quite sensitive topic in a sense because so your brand strategy ultimately also dictates some pricing strategy, in a sense, because you believe that you are a premium brand and therefore you want to have a certain premium brand perspective in the market brand image I would say. Often that also implies a higher price however because you're not by you by regulations you're not allowed to dictate what your retailers or what they should charge the consumer for your products, because a retailer is entitled to do that themselves, it's all about the relationship you have with the retailer and if they would adhere to that higher price it price premium basically on that premium brands. So that’s very much aligned and it also applies your multi-channel strategy. So if you, for any reason, see that a lot of channels different channels it's going to be more difficult to maintain or control in a sense at that higher price premium. in comparison if you just have two specific retailers and maybe your own direct channel that is of course easier to manage as a brand Grace So if brands are going to go direct to consumer is it difficult to build a strategy or is it relatively easy? I guess it depends on the brands right? Jasper: It depends on the brand and also I think in the policy you set. So basically you need to have a story or you need to have an operating model on your direct to consumer channel and that adheres to certain deals or certain agreements you have with your retailers. So and with the policy in place you can always reflect back to the policy if any of the retailers are having doubts about your price position of a certain product in your own D2C channel. but of course is always in the balance in it and the primary and I think I was also the most interesting and challenging part of it is how do you achieve that balance in your policy? so your pricing policy in that sense to not risk any issues in your multi channel strategy. Grace: Do you have any tips for finding a balance? Jasper: So I think it's all about having the discussions of course. Grace: With the retailers? Jasper: With the retailers as well but also understand how different markets operate because so often these are programs, commercial policy programs, that are that are designs centrally I think for my headquarters’ point of view, while the markets are also very important to consider, also given the different consumer behavior in those markets, of course. Secondly I also think it's very helpful to have some new eyes to help you out with these kinds of programs I would always have at least reach out to any consultant or something else also very helpful I think that's to better understand how other brands are dealing with it and also to ask the right questions, basically. Grace: So is this something that Omnia can help with then, that consulting? Jasper: I think one of our power partners are better like A.T. Kearney, as an example, because this is more on a real strategic level. we of course can very much help with the execution of that policy and also probably with the design of the operating model because it’s all about the synergy across the system, which potentially could be Omnia, but also across your own process and your own people that you have your organization Grace: Thank you for chatting with me Jasper. If people want to get in touch with you, what’s the best way to chat? Jasper: So people can send me an email, of course, or drop me a note via LinkedIn. Grace: Cool, and I will include that information in the show notes as well. Thanks! Jasper: Thank you! Grace: Thanks for listening to price points by Omnia retail. If you’d like to get in touch with Jasper specifically, you can drop him a note at Jasper@omniaretail.com. If you’d like to go a step further and try Omnia free for two weeks with your feeds, feel free to give us a call at +31 (0)85 208 3140. I’ll include all of that contact information in the show notes as well. Lastly, if you liked this show, let us know! Send me an email at Grace@omniaretail.com and let me know what you thought, or if you have an idea for a future topic. I’d love to know what any of you who are listening think. 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 JASPER WIERCX: Email: jasper@omniaretail.com LinkedIn: Visit here TO CONTACT GRACE BALDWIN: Email: grace@omniaretail.com LinkedIn: Visit here

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