Blogs, Whitepapers, News & Customer Success Stories from Blue Ridge

Blogs, Whitepapers, News & Customer Success Stories from Blue Ridge


Bad Pricing Optimization Strategies: What’s That Smell?

July 17, 2019

Cliff Isaacson, Executive VP of Product Strategy at Blue Ridge cloud-native solutions for demand forecasting.
Retailers have already been feeling the squeeze to fine-tune their pricing strategies for quite some time now; thanks to Amazon, distributors are now being dragged right into the thick of it.
Distributors are stuck in the middle of the supply chain, with ecommerce having expanded into their turf. Many are having to re-examine their delivery models and pricing optimization strategies in order to defend against rising competition, costs and other threats.
Never before has pricing been a more elusive — yet crucial — component of a distributor’s business. You can throw Amazon under the bus all you want (and you have great reason to); but the cold, hard truth is that today:

* Pricing is more elastic & harder to determine
* The complexities around pricing are accelerating every day
* Pricing is an increasingly impactful force on your business (whether a competitive threat or strength)

There’s no magic sign to illuminate the perfect market price for every item, every location, every channel, every day. But distribution businesses are finding success with new AI-based lifecycle pricing optimization strategies to react quickly to change and achieve their financial goals.
So today, PlanningPosts talks with Cliff Isaacson, Blue Ridge’s Executive VP of Product Strategy, about how to determine the right pricing optimization strategy for your increasingly complex supply chain.
Episode 6 Show Notes
Introduction
Todd Intro: Have you ever been faced with the need to improve profits, but don’t know which items, at which locations or on what channels, can get you there? Could there be under-priced or over-priced items eroding your profits without your knowledge?
Today we’re here with Cliff to talk about some pricing optimization strategies and AI-based pricing technologies that can help you quickly identify profit opportunities and test list pricing strategies to achieve your financial goals. Welcome, Cliff. Tell us a little about your background…
Cliff… (greeting + brief background on yourself)
Todd: Glad to have you here. So, what’s the big whoop here?
Cliff: Well, many retailers and distributors are really under-utilizing the advanced science and proven best practices available to maximize margin, profits, revenue and sales. It’s amazing to me how very little planners know about which of their products are under-priced or over-priced right now. There’s a bad smell in the air, but they have no insight into which channels or which locations are causing the problem.
Get this… A 1% change in price can have over 7% change in gross profits, significantly more than a 1% change in unit sales or decrease in COGS can do.
Todd: What’s causing this?
Cliff: There are so many challenges going on in wholesale & distribution right now – both domestically & internationally – which are forcing them to move faster & smarter. (The Amazon Effect, tariffs, transportation costs, etc.). The only way to react with agility is to invest in a solid pricing platform.
It doesn’t have to be some big, complex enterprise system. New purpose-built, AI-based pricing solutions are extremely sophisticated, yet very simple to roll out. And they WORK.
What are the benefits of AI-based pricing solutions?
Todd: What are the benefits of AI-based pricing solutions?
Cliff: These pricing platforms help you quickly identify under-priced items, position list prices against competitors, test list pricing strategies, and compare forecasted outcomes to achieve margin, profit, revenue, market share and other financial goals.