Faster and Smarter
Product and Pricing Decisions
Alexander Rink
CEO
© 2017, 360pi Corporation. All Rights Reserved.
Outline
• About 360pi
• Trends
• Tactics
• Tips
© 2017, 360pi Corporation. All Rights Reserved.
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Bio
• Over 25 years of
experience in
entrepreneurship, strategy
and operations
• Formerly Strategy
Consultant with Bain &
Company; Logistics with
Ford/Volkswagen
• MBA INSEAD; B.A.Sc.
Electrical Engineering
University of Waterloo
Alexander Rink
CEO
• Joined 360pi in 2010
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Who Do We Serve
Retail and brand innovators.
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Recognized By
Leading analysts and media.
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360pi Commerce Analytics Platform
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Key Platform Attributes
Highly
Scalable
• API Design
• Rapid Application
Development
• Integration-ready
Modular
• > 400 Retailers
Supported
• Real-time
• Crawler toolsets
100+
personyears
Engineerin
g
Automated
& Real-time
• > 800M crawls and 1.2B prices monthly
• >110M products, >18B price points DB
• $28/M prices, from $560/M in 2013
Accurate
Reliable
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•
•
•
•
• 94% Crawls Success
• > 99+% Product
Matching
• 99.99% Price Extraction
> 99.9% uptime
Fully redundant
Mission-critical
Anonymous
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TIPS
TRENDS
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The Rise of the Algorithms
Flight
Pilots
Autopilot
Systems
Drones
Financial
Markets
Floor
Traders
Back Office
Trading
Algorithmic
Trading
Retail
Merchants
Pricing?
Assortment?
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Purchasing Habits
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Back to School Pricing Gap
Labor Day
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Amazon in Office
Revenues - Amazon vs Staples
(US$B)
$120
$100
$80
$60
$40
$20
$0
2012
2013
Amazon
2014
Staples
2015
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TIPS
TACTICS
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Amazon’s Endless Aisle
All Products:
• All Sellers
• Amazon as the Seller
• Unique Sellers
> 419M
15.9M
~217K
Office Products:
• Office Products – All
14% increase from May
• Amazon
• Unique Sellers
• Unique Brand Names
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6.2M
333K
~40K
~60K
3.8%
5.4%
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Amazon’s Price Dynamism
Labor Day
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Reviews – Quantity and Quality
Shopper Reviews for Vacuums on Amazon
Amazon cracks down on
incentivized reviews.
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Amazon MP = Assortment + Reviews
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•
Reliance on exclusives to avoid direct price competition even in highly branded
categories like Toys;
Further exploring retailers’ quests for exclusivity this holiday, we examined the amount of overlap
•
Broader price spread in Electronics relative to previous years;
•
Target’s
usage
of broad-based
promotions
overlay
offersTarget,
in hotly
contested
holiday
dominant
retailers
offering hot holiday
Toys thisand
season
– Walmart,
Toys
“R” Us, and
of
course, Amazon. And as it turns out, there was virtually no product overlap between retailers.
categories.
AssortmentLessons
Tactics
(Example: Toys)
fr om Key Cat egories: Toys & Elect r onics
Walmart’s and Target’s lists revealed the highest resemblance with a negligible eight of the same
products from lists of 30 and 50 products, respectively. Adversely, Amazon presented the least
amount of product overlap with sampled retailers, sharing half as many equivalent products (four)
Virtually no overlap
between
retailer
Reliance on
Toy Exclusives
with Toys “R” Us’ listing of 50 products.
“hot” holidayFortoys
many retailers, Toys & Games is the must-win holiday category, so it’s not unusual to see a lot
of price dynamism and price competition at this time of year. However, this year we saw retailers
top holiday Toy
between Amazon,
• Only one
toycommon
common
toproduct
Amazon,
resort to an increased use of exclusives in an effort to reduce direct price competition with every
Walmart, and Toys “R” Us, and while stocked by
Walmart,
and
Toystheir“R”
Us oflists
major retailer carrying
own strain
the year’s most sought after toy, Hatchimals. This simply
Target, it was not mentioned on this retailer’s top
wasn’t an option
back in the heydays of Tickle-Me-Elmo and Furby.
Toys list.
Exclusives were the game for this
holiday’s must-have toy, Hatchimals
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1-855-360-0075
[email protected]
www.360pi.com
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1-855-360-0075
[email protected]
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4
Top Toys Not Necessarily Best Selling
Limited alignment between “top” and
“Best Selling” toys:
• Only 7% of Amazon’s Top 100 Best
Selling Toys referenced as top toys
by other retailers
• Even limited overlap between
retailer top toys and own best
seller lists
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Target,
17. Includes all
nued
e
ed
l
Mining Retail & Shopper Big Data
Holiday Shopper Preferences for Coffee Makers
Less than
e 4%
of Coffe
r M
a ker br ands
offe ed for sale garnered
95%
of shopper interest!
Most sought brand: Keurig
Most desired price range: $20-$50
Most popular type: Drip
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More than Amazon
BAGS
BREAKROOM SUPPLY
ORGANIZATIONAL
BULK
TECH/ELECTRONICS
SEASONAL
FURNITURE
PAPER
CLASSROO
M
GENERAL SUPPLY
ACCESSORIES
INK/TONER
PRINT
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More Tech than Retail
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TIPS
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Know Thy Self and Thy Customers
Define your identify and brand.
Choose your target market. Understand your
customers and their needs.
Establish your offering and pricing strategy
with identified key products and categories.
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What do You Stand for?
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Differentiate Your Assortment
•
•
•
•
•
Private Label
Variants / Options
Pack Sizes
Bundles
Services
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Identify the Top Brands
•
•
•
•
•
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Market Presence
Share of Shelf
MAP Compliance
Promotion Compliance
Content Compliance
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Pick Your Products Wisely
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Same, “Like”, Equivalent Matches
• Same shoe
– Unique product identifier
• Equivalent shoe
– User determined based
on found attributes
• “Like” shoe
– Scoring based on title &
description
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Who is Offering What, When and Why
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Curated Product Lists & Event Pages
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Powered by 360FlyerTM
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Content Matters
Rankings in Search Engines
Ratings and Reviews
Photos and Videos
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Monitor (and Update) Your Content
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Know Your Market – Retailer Pricing
•
•
•
•
•
Competitive Pricing
Sales/Margin Opportunities
Sales/Margin Threats
Zone Pricing
MAP Compliance
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Detailed SKU Price Histories
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Verify MAP Compliance
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Check Pricing by Zones
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Get Creative About Pricing
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Personalize and Engender Loyalty
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Service, Service, Service
• Installation, Returns, Technical Support
• Proactive fulfillment
• Subscriptions
• Outsourcing
• On-site
• Relationship (e.g. birthday cards)
• The Human Touch
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Value
• Omnichannel Mass
Merchandiser
• Premium private label
brand
• Suspected underpricing
• Evaluated similar
competing product
pricing
• 3% lift in gross margins,
no loss in unit sales
• Dealer-based Home
Improvement Retailer
• Inaccurate data, view of
landscape
• 3x the number of matched
products
• More complete and
accurate view of
landscape
• Feed into IBM price
optimization solution
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Playbook
• Strong brand
• Differentiated assortment
• Unique and
compelling content
• Creative pricing
• Fantastic service
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Inspiration
•
•
•
•
Ace Hardware: expert, local service, relationships
Build.com: curated collections, analytics
Hayneedle.com: increased marketing, product count
Jet.com: marketplaces
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Starting with a Single Step
• Products
– 1 category
– Limited retailers
– Expansion Options
• more retailers, categories
• Pricing
– Limited number of SKUs (e.g. up to 10,000)
– 3 retailers
– Expansion Options
• more SKUs, retailers, real-time API, geographic zones
• Up in < 1 week
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Thank You!
How can we help?
www.360pi.com
[email protected]
[email protected]
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