Author: Marielle Fong

Head of Marketing at Engage3
23 Jan 2019

Engage3 Joins Nielsen’s Connected Partner Program

Engagement Creates the Industry’s Most Comprehensive Pricing Intelligence Platform

Engage3 today announced their inclusion in to Nielsen’s Connected Partner Program. Through this engagement, data assets from both companies will have the opportunity to combine, creating an integrated competitor price monitoring and execution platform. The combination of Engage3’s Competitive Intelligence Platform and Nielsen’s rich retail measurement data gives retailers and brands the ability to identify, quantify, and prioritize specific competitor activity and how to best react.

“Engage3 and Nielsen both bring unique data assets about competitive pricing activity that provide insights into the marketplace landscape for a retailer,” said Ken Ouimet, CEO of Engage3. “By combining these assets, a retailer will better understand not only their competitors’ activities, but also the financial relevance of competitive price investments and differentiated assortments. They can then decide on what their best countermoves should be.”

Engage3 helps companies compete more intelligently in dynamic and hyper localized markets with store-specific competitive pricing and assortment insights. Engage3’s omni-channel Competitive Intelligence Platform (CIP) is an integrated end-to-end solution that uses data science to ensure data quality. CIP 1) enables retailers to automate the management and optimize the design of their competitive shop program, 2) uses demand-side product attributes to link “Like” competitor products, 3) reverse-engineers and monitors competitors’ pricing strategies, and 4) visually displays these insights via web-based reporting that is integrated with Nielsen’s own reporting portal.

The two companies are already serving several joint customers. “We are excited to bring an even deeper understanding of the competitive landscape to retailers and brands,” said Rob Culin, Senior VP of Personalization and Business Development at Engage3. “As a Nielsen Connected Partner, we can provide the most comprehensive level of visibility and understanding of competitor activity within any given market. We look forward to creating new levels of value for mutual customers we serve.”

About Engage3
Engage3 was founded by the creators of KhiMetrics (acquired by SAP), who are credited with creating the retail price optimization space. Engage3’s leadership team is composed of former KhiMetrics, SAP, dunnhumby, KSS Retail, and IBM/DemandTec executives.

Engage3’s focus is on data quality and management which are the foundation of successful price optimization implementations. Engage3’s Competitive Intelligence Platform is an integrated end-to-end solution that uses data science to ensure data quality. Engage3’s Competitive Price Response (CPR) optimizes pricing, and manages a consistent price image across different channels, markets, and categories while providing control over your company’s quarterly sales and profits.

Engage3 was named in the top 1,500 firms for two years in a row (2017 and 2018) in the Inc. 5000 Fastest Growing Private Companies in the U.S. It also recently raised its Series B financing from retail technology-focused venture capitalists. For more information, visit www.engage3.com.

15 Jan 2019
Price Image

Using Price Image to Formulate Pricing Strategy

Price Image is how shoppers perceive a store’s pricing relative to its competitors. It is not the same as Price Index. Many more things go into establishing price image, including promotion programs, elasticities, seasonality, price ending numbers, and the overall design of a retailer store.

Price Index vs. Price Image

Price optimization solutions that are available today are based on rules and price indices that exclude your desired price image. What is needed are psychological models that measure your consumers’ perception of your pricing AND predict the impact of price changes on that image.

At its core, Price Image takes customer excitement into account. Whereas Price Index relies on historical data and plotting points, Price Image is predictive and non-linear – making it much more useful in making strategic pricing decisions. It incorporates psychological elements, making it a consumer-specific metric.

A Nobel Prize-Winning Approach

The calculation of Price Image was inspired at Engage3 by Markowitz’s Efficient Frontier Theory. It’s a theory  that has been successfully used for decades in managing financial portfolios and is now applied to retail pricing.It enables retailers to strategically manage competitive price adjustments so they can balance their profit goals with a desired price image in the market.

Efficient Frontier

What to Look For in a Strategic Pricing Solution

Price Image takes psychological factors and applies them to pricing data. The resulting models can be used to predict future profitability and are not reliant on historical data. Below is a list of what to look for in a strategic pricing solution:

  • Integration with clean, comprehensive, and accurate competitive intelligence data
  • Statistically-driven performance reporting that separates real pricing impact from market level “noise”
  • Streamlined workflow for competitive price recommendations and approvals
  • Alerts for incomplete or outdated competitive data for review
  • A visual price modeling tool to define the impact of strategic pricing alternatives
  • Competitor activity and movement callouts on highly elastic products
  • Makes price recommendations based on your objectives for:
    • Price image
    • Profitability
  • Allows Merchants and Pricing Teams define their strategy and show the financial tradeoffs for different alternatives

The predictive model is especially valuable in forecasting sales, because Price Image allows a retailer to see how its customers are responding to different pricing strategies. Greater visibility translates to higher profit margins and happier customers!

Learn more about how the Efficient Frontier Theory is applied to retail pricing in this video.

10 Jan 2019
Earth Fare

CEO of Earth Fare Talks Shop With Ken Ouimet

At the inaugural GroceryShop event in Las Vegas late last year, Frank Scorpiniti, CEO of health and wellness store Earth Fare, sat down with Ken Ouimet, CEO of Engage3.

Frank talked about hiring a Chief Medical Officer for his stores, bringing more value to his health and wellness shoppers, and how he envisions a future of 1:1 customer-centric marketing using loyalty data in the very near future.

Following is their conversation:

Ken: Welcome, Frank, thanks for being here at the show with us today. What’d you think of the show?

Frank: The show’s been well organized, there’s an immense amount of emerging technology that really excites us for the potential to have it help Earth Fare continue to grow.

Ken: Is there any particular technology you’re most impressed with?

Frank: Well I spent some time on the exhibit floor and I was pretty impressed with what seems to be some off-the-shelf technologies to help us eventually create more attribute conversation with our customers, right on the sales shelf. And our customers are really seeking better health and wellness, so in order to tell a product story is something that we’re really looking forward to leveraging.

Ken: How would you communicate that to customers?

Frank: Well I think we have a lot of work to do to figure that out. That’s been a big challenge for us. As the leading grocer in North America with the cleanest product assortments, one of the biggest challenges we have is getting the message across to our customers about how unique our assortment really is, so I don’t have that solved yet.

Ken: One of the technologies that I was really impressed with was seeing the advances in the speech recognition.

Ken: At one end I saw something by Apple recently where it actually had a bot that could schedule a haircut for somebody, and get through all the navigation of a real conversation. I was curious to get your thoughts, as we get these digital assistants starting to have these capabilities that talk to people in real time, you see an opportunity where we could use technology to get back to the old store where the grocer knew the customer, and have a more intimate relationship with each consumer.

Frank: Why, I suppose that’s an opportunity, I think customers have a lot of questions in our stores. We have fantastic team members that, many of whom are lifestylers, they live the health and wellness lifestyle, but some of the questions are becoming more complicated about health, so the potential to have that kind of on-demand understanding and data could potentially create an experience for a customer that’s above what we can achieve today.

Ken: Yeah, I imagine as people become more aware of the foods they eat and the effects it has on their bodies, they’re getting more particular on what they eat.

Frank: Yes, consumers are starting to become very aware of the U.S. food supply and that over the years it’s had many, many more chemicals go into it. Some may say some of these products aren’t foods, maybe they’re stuffs with calories. We think that more Americans are looking for healthy foods to feed their family and feel good about what they’re doing.

Ken: I’ve seen a naturopath the last ten years and they routinely will take blood samples and test food sensitivity.

Frank: Yeah

Ken: And I was blown away when I asked them how many people were affected by food sensitivities, and he said it was roughly 70% is what they’re estimating, but only less than 5% are aware of it. There’s a lot of people out there that are affected but don’t know that they’re affected, and some of the athletes are starting to realize that they need to cut out the foods they’re sensitive to and their performance goes up. My brother has a doctor that, he has his office on top of a grocery store, and walks his customers through the aisles to show them what to eat. I’m just wondering, have you thought about having maybe even naturopaths. I know you have a medical officer, is that any direction you’re going?

Frank: We have a Chief Medical Officer, Dr. Angela Hind, and she keeps us on the cutting edge of making sure that we take out of our stores. We’re trying to keep away from things that make our customers sick, and she can only be in one place at one time. Some of the exciting stuff that I think is in our future, particularly with what you’re working on at Engage3, Ken, is our ability to take our loyalty data, where our customers share with us some of their needs around health, and be able to customer-centrically create one-to-one offers. And maybe that could take the place of the naturopath, probably not all the way to the extent your brother experiences or having a naturopath above a store, but the opportunity to guide a particular person with food sensitivities into things that are safe for them, say through an app that [ Earth Fare ] eventually could offer our customers, that could be an incredible experience that I don’t see happening today.

Ken: Yeah, I think there’s a real need for that, because you start looking at reading the labels for what fits your diet, that’s a lot of work. I would think as a consumer I would want something that navigates me around the store like the GPS navigates me around the city.

Frank: I think that could be just an incredible advancement in retail for [ Earth Fare ], we have a food philosophy that disallows a lot of artificial ingredients, and so we say to our customers, “We read the labels so you don’t have to.” That’s removing a lot of the chemicals, but to take it to the next level that you’re describing, then tailor the shop for each individual consumer, it really could excite our customer base. And they’re already looking for better health so it’s the right audience.

===end===

Engage3 Competitive Intelligence Platform helps retailers like Earth Fare improve their pricing performance and compete more profitably through data science & analytics. To learn more about voice-activated shopping and other innovations discussed at GroceryShop, watch this video of Tim Ouimet discussing the rise of agent-based shopping.

18 Dec 2018

The Aldi Effect: Are Walmart prices higher in locations where there is no Aldi store?

When European retailer Aldi started opening stores up and down Britain in 2016, people who lived close to a new retailer location started noticing that the value of their homes went up by as much as £5,000. It was called the “Aldi Effect” by the local media and, soon enough, the vicinity of an Aldi store to a piece of property became a listing feature.

Aldi started putting up more stores all over the U.S. starting in 2011, with a total of 1,600 stores to date. And just like in the U.K., it would seem that there is yet another advantage to having an Aldi store in your neighborhood – lower prices for everyday groceries at your local Walmart store.

Walmart and their everyday low price (EDLP) approach has consistently driven a low price image across the U.S. With their limited assortment and private label focus, Aldi has also worked to deliver customer value through low prices. When both retailers are present in a market, they have demonstrated an ability to fight head-to-head for low-price leadership.

Engage3 collects and monitors grocery pricing in markets across the U.S., and identifies pricing patterns and market trends.

For this study, we created a basket of 50 grocery staples that were price checked at three Walmart locations within each of the four Texas markets studied – Austin, Dallas-Fort Worth, Houston, and San Antonio. Dallas and Houston have 36 and 50 Aldi store locations, respectively, while Austin only has 1 store location and San Antonio has none. The competitive landscape in Dallas-Fort Worth and Houston is much more robust, with not only Aldi in the mix, but Kroger and Safeway banners as well.

Our study revealed that in Austin where there is only 1 Aldi store location (north in Pflugerville), Walmart pricing for the basket of staples was 16.2% higher than in Dallas, and 17.6% higher than it was in Houston.

Aldi Report Austin

In San Antonio where Aldi has no store presence and where H-E-B and Walmart are the dominant grocery players, we found that the Walmart basket was between 21% and 22% higher than the exact basket in Dallas-Fort Worth and Houston, respectively.

Aldi Report San Antonio

 

While the average pricing differences in the four cities taken together were between 6% and 11%, some pricing disparity on items like peanut butter and mac and cheese were fairly significant. The chart below shows peanut butter at a Walmart store in Dallas-Fort Worth priced at $1.18, while the same jar was priced at $2.18 in Austin – a whopping 54% difference. Similarly, the mac and cheese, priced in the Dallas-Fort Worth stores at $0.34, was double the price at $0.68 each in Austin.

Aldi Report Table Austin DFW

The same pattern can be seen in Houston, where there are currently 50 Aldi stores. The chart below shows peanut butter at a Walmart store in Houston priced at $1.78, while the same jar was priced at $2.58 in San Antonio, or 45% more. The same mac and cheese, priced in the San Antonio store at $0.68, is 100% more expensive than in Houston at $0.34.


The market basket data used in this analysis is objective and precise. But while the same 50 items were used across all markets, the correlation of Aldi’s effect on a market is still subjective.  Based on Engage3’s observations of competitive pricing data across the U.S., we have determined consistent patterns of Aldi’s influence and effect on market pricing.

Pricing has always been like a chess game, where each retailer is reacting to their competitor’s moves, while trying to predict how their competitor will react to their maneuvers.  But, unlike chess, this game is often played with 3 or more players, and aggressive moves can make it difficult to discern strategy from reactive tactics.

For more information on how to build a strategic competitor assessment and market price monitoring program, watch our competitive pricing video here,  request our white paper on how to leverage AI and big data in competitive pricing here, or contact us at 530-231-5485.

 

 

16 Oct 2018
ken Ouimet honored at the mondavi center in Davis

Ken Ouimet Receives High Honor from UC Davis

The University of California, Davis presented the 2018 Distinguished Alumni medal to Ken Ouimet, CEO and Founder of AI retail price innovator, Engage3. Ken received the award alongside JoeBen Bevirt and Cynthia Murphy-Ortega at a special alumni celebration at the Mondavi Center on October 26, 2018. The award is given to alumni who have achieved an overall high distinction in their field and have contributed a distinguished service to the college, profession or the community. 

Ken joins the ranks of other notable and decorated alumni of the College of Engineering, including Mars Lander Team Lead Adam Steltzner, Astronaut Steve Robinson, and Hyundai Motors Vice Chairman of R&D Woong-chul YangWatch the Mars Lander video “7 Minutes of Terror: The Challenges of Getting to Mars” here.

The College of Engineering has had over 22,500 graduates since its inception in 1962. Among the alumni are company executives, doctors, technological innovators, and an astronaut-turned-professor. Beginning in 1989, UC Davis began awarding the honor of Distinguished Engineering Alumni annually. To date, only 64 awards have been given out.

 

29 Aug 2018
Engage3 Climbs Up the Inc. 5000 List

Engage3 Climbs Up the Inc. 5000 List

Engage3, which helps retailers and brands enhance their pricing performance through data science and analytics, today announced that they have been included, for the second year in a row, in the prestigious Inc. 5000 List of Fastest-Growing Private Companies in the U.S.

Ranked at #1,458 last year, they climbed up 327 spots to their new ranking of #1,151. No company in the 2018 list has grown by less than 50 percent over the last three years. Companies who make this list are considered as true job creators, as only about 12 percent of American companies achieve one-year revenue growth of 25 percent or more.

Engage3has a 97%+ customer retention rate and has grown the number of its retail customers across the US and Canada by 56% between 2017-2018. The company has successfully expanded its platform to support sporting goods, electronics, apparel, and pure play e-commerce retailers over this same period.

Ken Ouimet, Engage3’s CEO and Founder, said, “We are thrilled to make it to the Inc. 5000’s fastest growing companies two years in a row. It is great validation of the strategy and value that we are providing to our customers, “ he added.

The companies on the list amassed more than $206B in revenue in 2017, up 158 percent from $79.8B in 2014.

“While these last three years of growth have been tremendous, this is only the beginning for us and we look forward to continuing the growth at an accelerated rate,” said Edris Bemanian, Engage3’s Chief Operating Officer. “We’re well on the path to revolutionizing retail pricing by improving retailers’ price image and profitability. This award is a testament to our amazing team’s unique ability to execute against that vision.”

About Engage3

Engage3 has assembled a team of price optimization pioneers to develop the next generation of price optimization.  The company was founded by the creators of SAP (KhiMetrics), who are credited with creating the retail price optimization space. Engage3’s leadership team is composed of former SAP (KhiMetrics), dunnhumby, KSS Retail, and IBM/DemandTec executives.

Engage3’s focus is on data quality and management which are the foundation of successful price optimization implementations. Engage3 Competitive Intelligence Platform (CIP) is an integrated end-to-end solution that uses data science to ensure data quality.  CIP 1) enables retailers to automate the management and optimize the design of their competitive shop program, 2) uses demand-side product attributes to link “Like” competitor products, and 3) reverse-engineers and monitors competitors’ pricing strategies. Engage3 Competitive Price Response (CPR) optimizes pricing, and manages a consistent price image across different channels, markets, and categories while providing control over your company’s quarterly sales and profits.

Engage3 was named in the top 1,500 firms for two years in a row in the Inc. 5000 Fastest Growing Private Companies in the U.S. It also recently raised its Series B financing from retail technology-focused venture capitalists.

More information is available at http://www.engage3.com.

25 Jul 2018
Retail Predictions

Ken Ouimet’s 5 Big Predictions for the Retail Industry

Engage3 is working to create the ultimate platform for retailers to monitor and develop pricing strategies. Even when focused on products at the store and item level, changes in the market influence these strategies significantly. I met with our CEO, Ken Ouimet, in front of the beautiful Mondavi Center in Davis, California. With big changes at Amazon and Walmart this past year, I asked him to describe the future that he sees for the retail industry.

Gartner identified Ken as one of the pioneers in the retail pricing optimization space. In this video, he shares his insights and enthusiasm for what’s ahead. You can also watch the video here.

 

 

13 Jul 2018

Comprehensive Visibility

One of the largest opportunities for retailers today is to improve their visibility and figure out how their competitors are pricing within a given market. The challenge is how they can do that using their existing budget.

Some large U. S. retailers are making their price adjustments based on a single competitor location in a region. Take a market like Atlanta, for example, which is an area of 8,300 square miles with more than 6.8 million people. Many retailers will take that market and price check one competitor location there, and then base their pricing for the whole Atlanta market, using this very limited information.

“This is not a very good way to get your pricing right for your customers,” Lyle Walker, VP of Strategic Enablement at Engage3, says.

The real opportunity is for retailers to improve their visibility and really understand how their competitors are pricing their products across the market. Engage3 solves this problem by utilizing online data, in-store data collection, and machine learning to QA collection processes. This leads to data that is accurate. We then deliver this back within hours so a retailer can really understand what their competitors are doing across their markets and locations, and even understand what their competitors’ KVIs are, etc.

“Without adding to existing competitive shop budgets, we can give you a window into your competitors’ reaction to new prices. We can track this over time and measure it, and then report against it,” Walker said. “You can make refined decisions that are localized to your markets and to your customers who shop at those sites,” he added.

Watch Lyle talk about what it takes to have comprehensive competitive pricing in your market.

05 Jul 2018
Engage3 Private label Q1 Pricing Report

Q1 2018 Pricing Report: Private Label, National Brands, and Fresh Items

In a study of prices across more than 2,000 items and more than 225,000 pricing records collected during the first three months of 2018, Engage3 reports on who led in the private label, national brands, and fresh areas across 46 different banners.

Aldi Leads in Private Label

Engage3-Grocery Private Label Price Index for Q1 2018
Engage3-Grocery Private Label Price Index for Q1 2018

Aldi led in lower prices on average at -32% less for its private label, beating Target, H-E-B and Trader Joe’s, who came in at -12%, -9% and -9% lower prices respectively, in this study. At the other end of the spectrum, Vons trailed everyone else with the highest pricing for private label at a price index of +10%, followed closely by Safeway at +9%.

Aldi and Trader Joe’s Shine in National Brands

Engage3 Pricing Strategy-Grocery National Brands Price Index for Q1 2018
Engage3-Grocery National Brands Price Index for Q1 2018

Aldi and Trader Joe’s, who carry a very small number of national brands in their stores, still managed to lead at -43% and -30% lower, respectively, in average pricing for the items in this study. Kroger and H-E-B followed with national brand pricing of -16% and -15%, respectively, while Sprouts surprisingly lagged at +5% for national brands.

Aldi, Trader Joe’s, and H-E-B Lead the Way in Fresh Pricing

Engage3 Pricing Strategy-Grocery Fresh Items Price Index for Q1 2018
Engage3-Grocery Fresh Items Price Index for Q1 2018

Aldi took home the top spot in lower pricing for Fresh items at -31% for Q1 2018, followed by Trader Joe’s and H-E-B on par at -13%.  Publix Super Markets and Safeway charged the most in the first quarter of 2018, on average for the items in this study, with a +7% index. Albertsons followed those two at +4% higher average pricing for Fresh items.

To receive a full detailed report or get more information about the full data, REGISTER HERE.