Electronic commerce in its many forms has improved how businesses deal with customers. Online businesses earn even more during the holiday seasons. According to BI Intelligence, retailers will generate about $100 billion in online sales in Q4 2014 alone — a 16% increase compared to the same period in 2013. Even as mobile commerce has given rise to an all new business model for users in both developed and emerging economies, though, businesses will need to optimize the way sellers price their goods.
According to Arie Shpanya, CEO of pricing analytics firm Wiser, the key to effective e- and m-commerce is finding the right mix of product, timing and price. Shpanya’s team founded the big data startup with the basic ideal of enabling businesses to offer “the right product, at the right time, at the right price.”
A second-time e-commerce entrepreneur, Shpanya successfully bootstrapped his first startup in 2009, with similar focus on online retail analytics. The Israel-based entrepreneur actually came from a legal background. He has an LLB degree and worked for Israel’s attorney general prior to his involvement in tech startups. However, his expertise is not entirely unrelated, as he has specialized in intellectual property law, internet law and contracts law. In terms of running a small business with partners and investors on board, knowledge of the law can be helpful in ensuring you don’t get the losing end of a business deal.
Wiser actually counts several high-ranking executives from e-commerce companies like Amazon and eBay, and advisors include luminaries from both brick-and-mortar businesses and online enterprises like Wal-Mart, Staples and Toys R Us. Even with these connections, however, Shpanya says that Wiser’s end goal is to disrupt major online retailers’ hold on dynamic pricing by enabling retailers at large to dynamically-price their own goods.
Having big data is not enough, however. What matters is finding meaning and getting actionable insights from this data. Here is an excerpt of Bright Side of News*’ interview with Shpanya.
Bright Side of News*: What was your inspiration for the idea behind Wiser? What’s the importance of pricing strategy for businesses?
Arie Shpanya: For retailers, it’s all about offering the right product, at the right time, at the right price. It seemed like there was one eCommerce behemoth (Amazon) that was doing it right by utilizing the power of data to optimize their strategy. We created Wiser because we wanted to disrupt Amazon’s hold on dynamic pricing by providing the necessary technology to retailers. We bring Amazon’s wisdom to the world’s top merchants by monitoring over 25 million products daily and analyzing data in real-time.
Pricing strategy affects your top and bottom line. But staying both competitive AND profitable in a rapidly changing marketplace can be incredibly difficult. You don’t want to get caught in a price war, but you don’t want to lose sales to a lower priced competitor. An effective pricing strategy is finding the balance and choosing a flexible pricing strategy that identifies and capitalized on opportunities to raise prices at times, and optimize for revenue or profit, according to your overall business goal.
BSN*: What is the advantage of using big data analysis instead of doing market research through other means?
AS: The key is automation, and analysis.
Wiser not only arms retailers with pricing intelligence and repricing, but is also innovating on the cutting edge of e-commerce pricing. Wiser empowers retailers with advanced tools such as assortment optimization, demand elasticity engines (multi-factor estimation and cross-product elasticity to name a few) and machine learning algorithms that maximize sales while maintaining margins. Wiser partners with merchandisers, marketers, and buyers alike by empowering them with the necessary tools to build and sustain real business value.
Pricing is elusive, painful, constantly changing and based on hundreds of different factors. Wiser breaks that down — specifies it for your business and provides you with the strategies that will make you more profitable or fit within the strategy your organization has adopted. It’s nimble, flexible and performs on-demand.
BSN*: Can you share some trends in data science? Is there anything significant that has happened in this industry that entrepreneurs, developers and even users should be interested in?
AS: Big data isn’t just a buzzword. We all have piles and piles of data – now it’s really about providing meaning and getting actionable insights from that data.
One major trend is emphasis on real-time analysis. This is only possible with automation.
Another is the democratization of it. There is a need for (and rise of) easy-to-use tools that aggregate and perform advanced analysis that was previously limited to behemoths with the resources/budget that most companies do not have.
BSN*: Do you have any advice for entrepreneurs or startups in search of viable ideas? What industry or specialization should one focus on?
AS: Rather than limit your thinking to a particular industry or specialization, think about it this way. Identify a need — are you solving a real problem/pain point/unmet need? — and go from there.