Revenue AI Precision Pricing

Precision Pricing

Imagine being able to manage all the prices of all the products in your portfolio, on a per-retailer basis, in real-time. This is the power of Revenue AI’s Precision Pricing module to help drive your strategic goals to achieve optimal revenue. The exponential growth of data combined with Augmented Self-Service Analytics (SSA) empowers organizations to capitalize on opportunities with incredible granularity.

Putting Big Data to effective use is difficult for many organizations depending on Data Scientists to translate the data so everyone else can understand it. RAI (our AI-driven Digital Assistant) provides reports and analysis in plain English along with clear charts that all stakeholders can understand. Interacting with RAI is as simple as asking a question or clicking on relevant follow-up questions. Here’s a quick look at all of the components of our Precision Pricing module

Dynamic Pricing 1.0 attends to continuously tracking the prices of all the products in your portfolio alongside your matching media investment and supply situation. Imagine having Google-like search capability to get immediate reports and analysis on your product portfolio from every possible angle. This component places your history of volume, value, and market share activity in each product category, channel, and retailer at your fingertips. In turn, and relative to your entire product portfolio, this data helps:

  • Determine SKU-level price elasticities.
  • Identify SKU’s with the greatest and least potential for price adjustments.
  • See which SKU’s contribute most and least in driving/draining revenue.

Scenario Simulation for Price Changes and New Products takes users beyond on-demand reports and analysis so they can interact with data directly. RAI makes it so users can quickly conduct simulations. Users can introduce new products or adjust product prices to predict an action’s impact on portfolio and category sales, as well as the net revenue forecast. Using competitor macro data, RAI calculates the size of the prize and growth rate so your team can evaluate the attractiveness of each opportunity. This component supports full Write-back functionality supporting Augmented Self-Service capabilities. Users can update databases to save contextual data for collaborative use with other users in support of their own reports, graphs, and charts.

Cannibalization Effects play a tricky role in price optimization. When forming the pricing strategy for the products in your portfolio it’s important to validate whether it’s promoting or suppressing growth. Introducing a new product or adjusting the price of an existing one can adversely impact the sales of other products – cannibalization. Several factors come into play including your Source of Volume, optimal and discounted product prices compared to key competitors, SKU-level price elasticities, product representation across different price tiers, and more. Whether making one or many changes, RAI provides you instant feedback on the cannibalization effect so you can better optimize for your entire product portfolio.

Price-Volume-Profit Verification helps you to quickly review your price and product changes to predict their individual and combined revenue impact. This Precision Pricing component provides users with direct insight into all associated product costs – production, shipping, promotions, and other administrative costs to define SKU-level break-even points. In addition to factoring in cannibalization effects, these reports can be used to guide promotions and define loss-leaders.

Category Price Drivers provide pricing history analytics to identify inflation and price followership roles in driving overall category price. Very few companies today have achieved what we call Level 3 RM Capability. In short, this defines an organization able to respond to market changes on a per store basis, in real-time. This capacity eludes most dominant price leaders. Where Revenue AI provides companies the ability to leapfrog their RM capabilities, they gain the agility of using a barometric model to outmaneuver their competition, however large they might be. This is not a stand-alone capability. Precision Pricing combined with Tailored Promotions can help you attract customer segments ordinarily beyond a brand’s reach.

The Granularity of Precision Pricing

Precision pricing requires huge data sets amounting to several Terabytes for large CPG organizations. Market data is readily available from internal tracking, points of sale, loyalty cards, mobile apps, IoT devices, public sources, data brokers, and even data exchanges. Altogether, this culminates in a dizzying amount of data well-beyond human-ability to process when using traditional tools.

RAI interacts with the data catalog containing your organization’s metadata including your Master Files (product, customer, and periods data) and Source Data (PoS, HHP, and PnL). More data sets can also be added very easily. A single product may be associated with two hundred or more data points and compared in countless ways. RAI translates the relevant data to answer questions in plain English with easy-to-read charts. RAI provides your organization a unified view of all of your data sets that can be shared and collaborated upon in real-time.

Whether you take twenty or two thousand different stores with identical layouts, product assortments, and prices, your product portfolio will perform differently in each. Large organizations in the CPG and Retail Industries in every major market have few options for continued growth. Growth must come from optimizing everything they have. Precision pricing makes it realistic for you to begin optimizing on a per-retailer basis in real-time – when your data is most valuable.