In my quest to find the latest innovations that are having a huge positive effect on business performance, I came across Advanced Pricing Logic. Did you know that leading retailers sell more than 90% of their products at full price? So, what about the rest of the retailers? If you’re a smaller retailer you know just how challenging it is these days to compete. The consumer has more options and the competition often leads to a race to the bottom. This isn’t good for anyone, except maybe the consumer. Fortunately for the smaller retailer it doesn’t have to be this way any more. Smaller retailers now have a tool at their disposal that will enable them to compete with the big boys thanks to Advanced Pricing Logic (APL) and their more affordable Big Data pricing optimization solution.
A large proportion of shoppers (85%) believe that price impacts where they’ll actually make purchases – not brand awareness, not slick marketing, and not convenience – but price. Previously, only the multi-billion dollar corporations could access the pricing optimization tools necessary to find the right selling price for a product. But, a new player on the market – Advanced Pricing Logic (APL) – is offering a big data software solution for price optimization to the little guys, allowing them to achieve greater profitability at 1/10th of the cost of their competitor’s models.
If you think of a large chain conglomerate like Walmart, with their “Everyday Low Prices” slogan, they’ve used price optimization software to determine what to sell their products for, and it really works. While they’ve got low prices, they still make over $100 billion in profit every year. Successful pricing strategies are more than having the lowest price on the market though, it is more about a comprehensive understanding of a product’s “price elasticity”.
Smaller companies have had a difficult time competing with these large corporations, because they couldn’t afford the price optimization tools needed to get this understanding. They weren’t able to price their products in a way that results in their best business performance and instead use manual methods of analyzing data, utilizing old-school spreadsheets that are just truly not efficient. The process becomes difficult, cumbersome and inaccurate for small and medium-sized businesses, that aren’t able to leverage expensive software in order to compete.
There are a number of factors to consider when pricing and what’s truly needed is a complicated and smart algorithm that will consider approximately 10-15 data points, including:
- Buying trends
- Days on hand
- Supplier performance
APL transforms three to five years of raw data from each company into usable data, which then results in sustainable pricing recommendations. Companies can then price competitively, which serves to increase their profits and overall ROI. And, increasing ROI is the main goal of many organizations, as found by a recent study, which also found that only ¼ of those in the study had up-to-date pricing optimization software for their organization. Those same respondents also reported that some of their main pricing issues that had a negative impact on business performance included prices that are too high or too low, markdowns are too steep or not steep enough, and that they can’t do a cost-based price analysis. All of these factors could be avoided using pricing optimization software tools.
APL took ten years to mold their software into an innovative solution for small and medium-sized businesses that literally had no choices in terms of being competitive in the world of product pricing. Their powerful pricing tools allow these smaller organizations to generate the same predictive analytics for their products as the big corporations utilize.