IBM, the 114-year-old American multinational technology company, has introduced a new cloud service called ‘Dynamic Pricing,’ aimed at ensuring retailers are selling their products at the most competitive rate going.
The idea of Dynamic Pricing is a deceptively simple concept. IBM’s new cloud service is designed to give retailers and other commercial entities up to date with competitors’ price changes. It will also provide information to the seller about when and why potential customers are abandoning their shopping carts before checkout.
Dynamic Pricing goes further than that however, using IBM’s substantial cloud base to analyse, react and automatically add discounts or decrease the price of products as competitors do.
The Dynamic Pricing model that IBM utilises is based upon different combinations and analysis of pre-configured performance data, such as browsing history, price stability within independent markets, inventory management, competitive pricing, and sales statistics.
The example used by IBM to demonstrate the potential of Dynamic Pricing to end users is that if a competitor were to suddenly roll out a promotion discounting a particular range or individual product, by say 15%, the cloud based Dynamic pricing will be able to react almost instantly.
“At any given moment, a retailer is no more than one click away from losing a customer online. IBM Dynamic Pricing executes real-time pricing recommendations at the scale and speed needed to ensure competitiveness in a volatile shopping environment,” said Stephen Mello, Vice President, IBM eCommerce & Merchandising. “This intuitive and dynamic pricing system improves visibility into what’s happening in the market, allowing retailers to make decisions that are best for their businesses and customers alike.”
Dynamic Pricing will most likely be used by commercial enterprises that also have an online presence. This will allow them to keep their virtual pricing and physical merchandising at the same rates. It will also allow online operators to leverage Dynamic Pricing’s ‘predictive intelligence’ to adjust their prices up, as well as down to both boost customer demand, and increase their revenue.