Blue Yonder Forward Pricing, provides retailers artificial intelligence for price optimization

Blue Yonder Forward Pricing, provides retailers artificial intelligence for price optimization : Blue Yonder, Forward Pricing ensure that e-commerce retailers set the optimum price for individual items and understand the effects price changes have on sales. By applying cutting edge machine learning algorithms to thousands of automated daily price updates this Software-as-a-Service (SaaS) offering package finds the balance between the number of sales and the price that generates the most profit. The easy to implement SaaS allows e-commerce to maximize profits by monitoring internal (sales history, real-time demand) and external data (weather, public holidays, school holidays, competitor pricing) leading to the optimal price point for any product. Forward Pricing continuously tests and measures the response to price changes by analyzing interactions between that price change and subsequent changes in demand. Gone are the days of manually tracking, measuring and altering pricing; Forward Pricing equips e-commerce businesses with the tools to automatically adjust the price to optimize revenue and profits.

Pricing is a core strategic component that greatly affects e-commerce retailers’ profitability. According to a 2010 study (The 1% Windfall, by Rafi Mohammed), a 1% change in price on average leads to an 11% change in margin. Blue Yonder's implementation of price optimization at a German retailer has helped to increase margins by more than five per cent while increasing new customer acquisition by two per cent.

Jan Karstens, CTO at Blue Yonder says: “Retail has become an ultra-competitive business and consumer behavior is rapidly changing due to a multitude of factors. This makes it difficult to develop an effective pricing strategy with gut-feel and manual adjustments alone. Most companies lack the software to approach pricing strategically and automatically, instead relying on a number of methods that have limited value. These include cost plus pricing; competition minus pricing; odd pricing (.99 cent) and time-based discounting. Blue Yonder has rigorously tested these traditional approaches and found serious limitations. Forward Pricing will deliver a huge strategic advantage to highly competitive e-commerce retailers by increasing revenues and profits and removing the unscientific approach of gut-feel.”

Forward Pricing is a SaaS product, which means low maintenance effort and fast activation. Once data is sent to Forward Pricing, it automatically starts to experiment, tune, optimize and deliver automated and individualized price updates based on the sales needed to generate the most profit. Blue Yonder’s team of data scientists manages Forward Pricing for the retailer, which relieves the need to recruit for additional personnel with the right skills to manage the software.