Note: We send a monthly email newsletter to all our merchants, letting them know about new product updates, and how to use our platform to their best advantage. Below is an excerpt from our May 2013 newsletter. We keep in regular contact with our merchants via newsletter, this blog, and email. We care about your questions and…
Public data suggest that over Thanksgiving weekend, the large internet retailers changed prices more than 2 million times. It’s fairly clear that they did so for reasons related to revenue optimization and competition. But what about the “rest” of retailers… did they change prices, how fast, and how optimally?
Our examination suggests that the science of dynamic pricing—dynamically changing prices to optimize revenue—is a new practice at most retailers and at many it’s not yet in practice at all.
Price competition in retail has always been intense, but it used to take weeks or months to play out. Now changes can happen by the minute. With the growth of online and mobile phone-based shopping, fast-changing prices create real-time sales implications that many retailers aren’t equipped to manage.
In the wild world of travel, millions of prices are in flux each minute and technologies have long been established to extract every marginal revenue dollar from the system. But in the retail world, we still live in an environment where prices are often set for a season, and coupons or some similar sales-period-based merchandising program are how price stimulation or competition is managed. Even the stalwart price sticker represents a limitation to effective management today.
Where do we go from here?
I think it’s clear we’re witnessing the rise of the always-connected, price-conscious consumer as a permanent and growing segment. But the mobile devices and back-end technologies that allow these consumers to search for the best deals anytime and anywhere also make it easier than ever for merchants to target them, match prices if necessary… and importantly, monetize.
Here are 5 ways merchants can maintain profitable relationships with price-conscious shoppers:
- Implement a smart approach to dynamic pricing: A smart approach to dynamic pricing is one that’s driven by strategy, governed by algorithms, and as close to real-time as you can get. The Wize Commerce price and search APIs that support our Shopping Network and Silhouettes allow merchants to do just that, by aligning specific search terms to specific products and current prices across a wide variety of competitors.
- Make comparison shopping work for you in-store: Our in-store optimization service, now in prototype, allows merchants to offer real-time mobile price matching guarantees and upsells to targeted shoppers currently in your store. By integrating POS, Web, and existing loyalty programs, merchants can create more personalized relationships and increase shopping cart size, while ensuring that the right percentage of sales and customers stay margin-positive.
- Optimize your online channels: Make sure your online presences offers broad product assortment, easy and clear access to product information, expansive marketing customization, and expedited delivery. Optimize (in other words: redesign) your online experience for mobile and tablet.
- Provide unique value in-store: Head towards unbundling the services in your store so that your in-store and online experiences fully complement each other. Innovate with new touch points to create new customer benefits. Empower your associates with information and the best mobile devices. At every touch point, acknowledge the online shopper in your store. If an in-store function isn’t equal to or better than its online equivalent, change or get rid of it.
- Create new channels specifically targeted at price-sensitive shoppers: Our new site Price Machine is an example of this strategy—giving merchant customers already using our Shopping Network the ability to add an online channel for price-conscious shoppers without undercutting their current channel strategies or performance.
Contact us to learn more about how our price optimization services can help your business thrive.
Public data suggest that over Thanksgiving weekend, the large internet retailers changed prices more than 2 million times. It’s fairly clear that they did so for reasons related to revenue optimization and competition. But what about the “rest” of retailers… did they change prices, how fast, and how optimally? Our examination suggests that the science…
The Wize Commerce platform uses big data and statistical methods to drive optimal monetization and ROI for our customers.
It all starts with predictive modeling.
To succeed in a simple system, you gotta have a gimmick (or so they say). But when you’re dealing with complex digital systems—with massive streams of real-time and offline data at every step of the way—you need powerful algorithms to beat the competition.
Like our merchant customers, we use algorithms every day to solve a myriad of challenges, including social interest identification, mobile conversion improvement techniques, SEM keyword selection and bidding, page optimization, product recommendations and ROI projections to optimize cross-channel marketing spend.
But for us, two things are different.
The first is our scale. We create over $1B worth of transactions per year, and have been delivering competitively unbeatable results for over a decade, working with many of the world’s biggest sellers across a huge range of categories.
The second is how much skin we have in the game. The nature of our business is that we have millions of dollars invested in keyword bids and other traffic and revenue optimization techniques at any one time. Essentially, we’ve “bet” the money before we‘ve even begun. So our forecasts better be accurate.
Predictive modeling is at the core of what we do and how we think. Statistical methods drive our technology, which in turn drives our statistical methods… and this virtuous cycle is what drives our business. Over ten years, millions of scenarios, and hundreds of product categories, we’ve developed our algorithms to predict:
- Quantitative ad value for different sites and publishers
- Optimal search rankings and recommendations
- Optimal weightings of social signals at each step of the purchase process
Behind the scenes, we use Hadoop for data aggregation, and Hive and Cassandra to store and access data across millions of products and user profiles. And we’re always refining. Search algorithm changes last year delivered significant revenue lift on Nextag.com and these algorithms are now used across many of our Shopping Network sites to optimize different objective functions.
Because we’re an independent service provider, when we win, our merchant customers win as well. Here are two common traps we help with:
- The big search, social, and content ecosystems have created enormous value, but their business models are essentially extractive: merchants who work directly with or optimize only for only one ecosystem are essentially playing blackjack against the house—and the house always wins. The Wize Commerce platform uses predictive modeling to optimize traffic and monetization across all channels, not just one.
- Over time, individual merchants tend to develop deep expertise in their own data and catalog and the unique quirks of their business. But the danger of narrow specialization is that you optimize the wrong thing, and ignore a trend, signal, or important technique that could help you. We’re expert at such techniques, as our Silhouette, our in-store optimization service, and others demonstrate with real results.
Contact us to learn more about how Wize Commerce predictive modeling expertise can boost your traffic and revenue performance.
The Wize Commerce platform uses big data and statistical methods to drive optimal monetization and ROI for our customers. It all starts with predictive modeling. To succeed in a simple system, you gotta have a gimmick (or so they say). But when you’re dealing with complex digital systems—with massive streams of real-time and offline data…
As Wize Commerce continues to grow both its suite of services and its client base, the e-commerce industry is taking notice.
Here’s an interesting look at Wize Commerce by Hendrik Laubscher, an e-commerce blogger based in South Africa. In his post, Laubscher notes how Wize Commerce is more than just the company that operates Nextag, and he’s right. We’re increasingly recognized for the broad and powerful set of monetization and traffic optimization technologies that we provide to some of the world’s top merchants.
As our own EVP of Sales, Mike Fury, said in response to the post: “Wize Commerce is about the platform. Our Shopping Network and Silhouette service allow us to meet diverse merchant needs through that platform.”
If you’d like more information about our suite of services, or if you want to learn about how Wize Commerce can help your company grow its online business, contact us.
As Wize Commerce continues to grow both its suite of services and its client base, the e-commerce industry is taking notice. Here’s an interesting look at Wize Commerce by Hendrik Laubscher, an e-commerce blogger based in South Africa. In his post, Laubscher notes how Wize Commerce is more than just the company that operates Nextag,…
Wize Commerce regularly hosts expert talks on topics of interest to our internal global staff, and external partners.
The edited notes and video for this talk are below.
How we’ve built our Services Platform
Wize Commerce is a platform for acquisition and revenue optimization of e-commerce traffic. We have been profitable for the past 10 years and Nextag is now the #2 paid comparison-shopping site on the Internet.
We’re evolving from a shopping-comparison engine, to offering our Wize Commerce platform to businesses outside of our company. To accomplish this, we have to make it easy for customers to leverage our platform. We think the best way to do this is to make this platform a set of services.
The work at Wize Commerce is progressing along two tracks. First, we are building a framework to support services with features like request prioritization, controlled rate of service requests, and automated generation of documentation to make it easier for people to consume these services. The second track requires developing and deploying the actual services themselves.
Having an SOA (Service Oriented Architecture) helps our partners achieve their goals by having all the heavyweight business logic, such as billing calculation, user personalization, search results customization , etc., go to the back-end of the website. So the front end of the website just has to worry about presentation.
Some of the services we’ve developed for our shopping comparison sites:
- Product search service, which allows us to access our vast catalog of millions of products.
- Our visit and click service, which allows us to track users across our site and allows us to bill merchants based on what features the user is seeing.
- Our Buzz Score service (a Buzz Score is basically a measure of the social buzz around a product), which will help a site create much more compelling social features.
Next on our roadmap is A/B testing services. Over the years, we’ve developed a very robust and highly optimized A/B testing framework in Java. We’re exposing this experimental framework as a service and creating a Ruby client for it.
When a client wants to sign up for services provided by Wize Commerce, the first thing they do is set up and provision their account. Secondly, they provide their catalog. We support several different formats for the catalog to make it easier for our customers. We call this our import service, which ingests a customer’s catalog and makes it available for search. Then, we agree on the specific products and categories we want to bid on.
When a user comes to one of our client sites, the first thing that will happen is our visit service will be called. This will create a visit, which will begin the process of tracking the user throughout the site. Next, the client site will call our experimentation service, which will determine which side of the A/B tests the user will be on – for the hundreds of tests we have going on at any given time. The user will then browse around the site for a bit, and when the user makes a significant click, they’ll call out to our click service which will record the click information into our data store.
In front of these three services, we have a shared externalization layer, which handles authentication, throttling, and json translation. What this allows us to do is control access to our services, as well as translate our thrift responses (Apache Thrift is the language in which our services speak) into whatever format the client wants.
In its end state, the Wize Commerce platform exposes millions of events that occur inside the platform in near real time to our clients, calling our traffic acquisition and revenue optimization services.
Subscribe to the Wize Commerce blog to get news on Wize Commerce expert talks and other events, as we launch them.
Wize Commerce regularly hosts expert talks on topics of interest to our internal global staff, and external partners. One of our recent talks features experts Jijoe Vurghese, Platform & Infrastructure Manager, and Julian Ong, Principle Engineer UI Platform, talking about the Wize Commerce technology platform. The edited notes and video for this talk are below….