This year I did not man a booth or guide people around the IBM pedestals but instead I decided to actually attend the National Retail Federation (NRF) as an attendee. I went to a lot of sessions, visited a lot of booths, and observed our very own IBM booths. As I walked the grounds and even waited in line for the free lunch box I was impressed with the dialog of others around me. Over and over I heard many talking about Watson and cognitive computing which then lead into other discussions about IBM and more specifically dynamic pricing.
The IBM booth was crowded pretty much every day, the turn out and excitement around IBM Commerce seemed to be at an all time high – I could barely walk through the booth!
This was the first year I witnessed a change in the dialog from the usual feature/function discussion of buy online, pickup in store, cart abandonment, catalog management, etc to features that will differentiate a brand in the market. More talk about consolidating brick and mortar and the eCommerce channels. The ugly truth that most companies still have separate teams supporting the same functions on the different channels. This then lead into many discussions around pricing. The theme this year at the IBM booth was dynamic pricing and cognitive (machine learning).
If you are interested in learning more about how this works you might want to check out the IBM Whitepaper “Attracting and retaining customers with insights-driven dynamic pricing“.
“More sophisticated retailers are not just reacting but instead proactively testing various pricing strategies to see what effect they have on their customers; they are sensing and responding,” – link
The paper also goes into discussing the challenges of consistent pricing across channels. The power comes when you begin to mix cognitive learning with dynamic pricing:
“As channels blur and retailers have multiple touch points with consumers, price coordination becomes essential….The holy grail of dynamic pricing is achieved through the application of cognitive computing, a self-learning environment that “Understands, Reasons, and Learns” from inputs to intuitively determine the best prices and promotions for customers in context.” – link
Lastly, the conversations around marketplaces were also very prevalent this year. If you are not familiar with marketplaces think Amazon. Manufacturers are looking to revamp their B2B networks with new user interfaces and shopping experiences that outperform the Amazons of the world. Moving from the traditional green screen ordering system to a friendlier online shopping experience like a Staples.com.
One example I heard was a manufacturer makes a widget which costs $150. It is of high quality and has a life expectancy of many years. However, knock-offs that look identical (literally almost the exact same picture) cost $50 on Amazon marketplaces. The $50 product is manufactured in China and is really a much lower quality with a shorter life expectancy. The problem is when you search on Amazon for the product you essentially see what appears to be the same exact product but one is $100 more – so which one do you think gets sold? This problem can be addressed by using a solution like the Mirakl Marketplace Platform to battle the Amazon problem and also give your interface for your partners a face lift. I had the opportunity to see the Mirakl demonstration live and I was very impressed with the user interface and the management capabilities it offers. It offers a complete vendor management solution where you can not only bring up a vendor very quickly but also get an holistic view of your products performance across vendors. Click the picture below to learn more about Mirakl.
Now, imagine a platform where cognitive dynamic pricing and marketplaces all work together. A manufacturer can then beat out the Amazon marketplaces by controlling their own marketplace and also get pricing insight through dynamic pricing!