Author: Marielle Fong

Head of Marketing at Engage3
17 May 2018
retailer

C&S Wholesale Grocers Partner with Engage3

On April 18 to 19, retailer C&S Wholesale Grocers held their 10thannual Tech West Expo at Thunder Valley Resort Casino in Lincoln, CA. Over 100 independent grocery retailers from the West Coast, including Hawaii and Texas, converged at the town Northeast of Sacramento.

Listed by Forbes as the tenth-largest privately held company in the United States, C&S Wholesale Grocers is a wholesale distributor of food and grocery store items with headquarters in Keene, NH.

C&S recently released their strategic retail pricing system and has chosen Engage3 as their partner for competitive retail pricing. “Engage3 IS the premiere partner in retail price information,” said Frank Puleo, VP of Retail Services at C&S.

Engage3 is a leading provider of solutions that help retailers and brands improve their pricing performance and compete more profitably through data science & analytics.

“We have worked with Engage3 for seven to eight years to deliver the best competitive pricing platform in one of our regions. Over the years, we’ve extended that partnership and now we have it on a national level,” noted Corey Quiring, Sr. Director of Corporate Retail Services at C&S.

15 May 2018
COO

Engage3 COO Edris Bemanian Talks Pricing Strategy, Pressures, and the Market

Last month, Robert Schaulis of Andnowuknow interviewed Engage3 COO Edris Bemanian on his observations of pricing pressures from the likes of Amazon and Lidl. “The biggest trend is that pricing and assortments are becoming more dynamic and localized,” Edris says.  He notes that e-commerce is now becoming a fundamental part of retailers’ strategies versus just a “me too” approach. Read the full article in Andnowuknow.com.

14 May 2018
pricing

White Paper: Leveraging Big Data and AI in Competitive Pricing

Big data and Artificial Intelligence (AI) are giving rise to new retail pricing strategies that were not possible just two years ago. The explosion of data available has provided the perfect storm for AI to thrive. Retailers are starting to differentiate themselves like hedge funds with high-speed pricing models and proprietary market data.

Find out how you can use accurate, localized competitive data and pricing analytics to execute your business strategies today. Register to download the white paper now.

13 Apr 2018
engage3

Engage3 at The C&S Tech Expo 2018

Visit Engage3 at The C&S Tech Expo 2018

Booth #12
April 18 – 19, 2018
Thunder Valley Casino Resort
Lincoln, CA
Hosted by C&S Wholesale Grocers

Edris Bemanian, COO of Engage3, will be a featured speaker on Wednesday, April 18 from 12:00-12:30 pm. He will be sharing his expertise on how retailers can enhance their pricing  performance through machine learning and AI.

26 Mar 2018

What to Look for in a Competitive Pricing Platform

What to Look for in a Competitive Pricing Platform

Precise and Accurate Data

First and foremost, a competitive pricing platform must have the ability to collect precise and accurate pricing data. This allows retailers to target competitive shops, optimize frequency, and specify which items to focus on within regions or individual stores.

Rather than casting a wide net to see what useful data gets brought in, retailers must be able to get a global look at the actions of their competitors while also drilling down to store-specific opportunities. When they have both views, they can see clearly where they are winning and losing. Essentially, such a system puts both a telescope and a microscope into the hands of merchants and their pricing analysts, enabling them to comprehensively study their competitor’s universe. It allows them to reverse-engineer their competitor’s approach to pricing and to develop a targeted response, especially if they see a weakness.

Quality Assurance Workflow

Real-time_QA_Competive Data collection
A strong quality assurance workflow ensures that data being collected is accurate.

A competitive pricing platform must also have a strong quality assurance workflow. With today’s mobile app-enabled technology, automated processes can greatly reduce manual errors and ensure that only quality data is being captured at shelf edge. Additionally, such apps can compare shelf data against historical records, flagging any SKU pricing that seems historically unreasonable. Advanced analytics can assure that the data being captured is accurate in terms of price, brand, sizing, and product attributes. This technology can eliminate much of the human error that has plagued competitive shop programs.

Product Attributes

With the rise of private labels, competitive pricing platforms must be able to compare product attributes. In traditional competitive shop programs, as many as 40% of items go unaccounted for because there is no UPC match. To solve this problem, competitive pricing platforms must be able to utilize visual data capture technology and advanced character recognition to compare product attributes. This allows product linking to occur not just by UPC, but also by key attributes and statement of ingredient similarities, i.e. gluten-free and organic. This creates a more accurate picture of a competitor’s private label pricing strategy and their total value proposition.

Customized KVI Lists Based on Statistical Analysis

MissionControl_Competitive Pricing Platform
Dynamic KVI list support can help you customize by store.

Historically, cost and timeliness have made it difficult to acquire quality competitive data. Given the dynamic nature of the retail environment, static KVI lists are not responsive enough to the realities of where to focus competitive pricing efforts across various geographies and store-specific categories. The retailer needs a pricing platform that allows them to shift from static KVI lists to ones that are easily customized by banner or even by specific store. Rather than taking a blanket approach, the critical decisions of where, what and when to comp shop should be based on strategic statistical analysis.

Drill-Down Capabilities

Merchants need the ability to drill down and understand the decisions competitors are making within specific regions, designated market areas (DMAs), cities and individual stores across their overall pricing strategy or within specific merchandise categories. This would enable merchants to lead their competition by being right on pricing with the right items that are important to customers at a localized level. Such flexibility in designing and executing a more targeted approach to competitor pricing would allow for significant savings in budgeted dollars for competitive shops. A retailer could go after the data they actually need when they need it, rather than spending dollars on costly full book programs.  

Correlating Online and In-store Pricing

In today’s world of e-commerce, more and more retailers are taking an omni-channel approach to selling. A technology-enabled competitive pricing platform needs to take advantage of advanced web crawling algorithms to acquire this competitive data and correlate it against the data captured by auditors in physical store checks. This would enable a more efficient and cost-effective approach to acquiring competitive pricing data.

Aligning Objectives

As advanced analytics enable faster and more accurate decision-making, organizations will need to change to more cross-functionally aligned metrics that strategically drive the financial success of a company. When considering today’s retail organizational structure, is what drives a merchant’s decisions the same as what motivates the employees in a pricing department? Having the data to make decisions regarding competitive pricing at the speed of retail requires a major step forward in enabling accurate pricing decisions to be made with a sense of urgency and strategic intent. However, to fully unlock its true impact to P&L, the retailer will benefit from progressive thinking around how to align objectives and an incentive structure that motivates and drives collaboration. This will enable different departments with complementary skill sets to pull the rope in the same direction and drive a total value proposition focused on the customer.

 

23 Jan 2018

NRF 2018: Retail’s Biggest Show Did Not Disappoint

I had the pleasure of attending NRF 2018 in New York City, and I must say that the self-proclaimed “Retail’s Biggest Show” did not disappoint. AI, big data, voice, and augmented reality companies were out in full force.

After attending a good number of the tracks, three main ideas about how to win in the next year seemed to rise above the fray: focus on pricing, deliver value to your customers, and enhance your user experience.

It was also clear that some of the big retailers are starting to position themselves as technology companies.

Kroger showcased their product called Kroger Edge, a shelf-based digital display that not only shows dynamic product prices, but also rotates to show advertisements and products’ nutritional information. Think rotating digital billboard ads like those you see at your local gas pump. The plan is to have this new technology installed in 200 Kroger stores nationwide by the end of 2018. You’ll see them first at the end-caps, and then at the regular aisles.

Below is a short video I recorded:

I spoke to Kevin Fessenden, Manager of Research and Development for Kroger Technology, who said that they plan on selling their solutions to non-Kroger retailers. This capability would allow stores to seamlessly adjust their prices and even offer personalized experiences to shoppers right where they make their purchase decision.

Doug McMillion, CEO of Walmart
Doug McMillion
CEO of Walmart

Walmart CEO Doug McMillan called his company a technology company after being named The Visionary at the NRF Foundation Gala on Sunday. Walmart’s $3B acquisition of Jet.com followed by other acquisitions of ShoeBuy, Moosejaw, and Bonobos  signals its serious commitment to eCommerce and enabling technologies. But wait, there’s more. Walmart also started its own technology startup incubator, Store No. 8, in Silicon Valley.

From robots scanning your store shelves, software systems that use lights and mirrors to provide shelf location of items, to store-traffic counting software, NRF 2018 was dripping in mind-blowing retail tech.

With more than 35,000 attendees and 3,400 retail companies represented, getting through the show could be overwhelming. At the “Brick and Mortar Store Strikes Back” discussion panel, Jason Breazeale, Senior Manager of Innovation at Ahold Delhaize, had a tip for attendees. “I usually visit the vendors in the perimeter of the expo halls, because those are the true innovators. I don’t spend much time in the center-hall. Those small companies will have the latest technology that just might get you your competitive advantage,” he said.

22 Jan 2018

The 7 Challenges of Modern Competitive Pricing

Strategic pricing is at the heart of retail competition. It has famously driven the business decisions of Amazon, Walmart, Lidl and Aldi that we see all over the news. But in order to develop more effective pricing strategies, retailers need a different approach to competitive pricing, one that addresses the historical challenges of competitive shop programs:

Problem 1: Low Completion and High Data Error Rates in Competitive Pricing Shops

Data capture has always been a labor-intensive, error-prone process. Price checkers match wrong items, capture the wrong price points (e.g. promotional vs. everyday retail) and encounter a variety of other issues. With quality assurance happening on the back end of the price-checking process, incorrect matches have the potential to pass through the system downstream to the retailer.

Problem 2: Like-product Comparison

Different assortment sizes and formulations pose challenges to price checkers who work from static comparison lists. With Amazon’s rapidly expanding penetration of the food retail market, center-store items are becoming more and more commoditized with price having a greater impact on consumer decisions. At the same time, specialty formats like Trader Joe’s and deep discounters such as Aldi and Lidl continue to execute on delivering cost-effective differentiated private label programs. The fresh side of the store is becoming the battleground where stores need to differentiate themselves. In order to do so, accurate competitive pricing programs that take into account size, quantity, formulations, and other attributes are needed.

Problem 3: Lack of an Integrated Omni-channel Approach

As traditional retailers move further into e-commerce and online advertising, their approach to competitive pricing has, for the most part, remained a manual process, limited by the amount of labor resources to physically shop competitor markets. By using technology to automate competitive shops, they can deploy more labor to focus on unique assortments and integrate online and in-store activities. This creates a more comprehensive picture of competitor pricing strategies.

Problem 4: Static Lists, a One-Size-Fits-All Approach

Often, retail companies rely on lists of Key Value Items (KVI’s) to drive both their competitive shop programs and their pricing strategies. These lists are usually static and don’t take into account differences across competitors and their diverse locations. This approach can be extremely inefficient as auditors go to stores looking for items that may not be part of that specific store’s assortment. When this happens month after month, it quickly becomes costly.

Problem 5: Tactical, Not Strategic

It’s easy to fall into the trap of using competitive pricing programs to fill tactical rather than strategy needs. Competitive pricing programs should be used to understand not just the competitor’s price on individual SKUs but also their total pricing strategy across their footprint. With consistent, accurate and real-time data, a retailer has the ability to look at trends within the marketplace, understand the actions of competitors, and use predictive analytics to ensure that their value proposition remains relevant to the customer.

Problem 6: Expensive: Throwing Money Away on Full Book Shops

In order to gain a comprehensive view of a competitor’s pricing, competitive shop programs often focus on a large number of items and numerous stores. This is due in part to the challenges mentioned above regarding data accuracy and reliability of the manual process. To increase reliability, retailers often increase labor by checking more items in more stores or increasing the frequency of checks. This is expensive. The top 10% of products sold typically represent 50% of the total sales dollars. Therefore, full book programs that invest as much in competitive shopping slow-moving items as in fast-moving products are not cost-effective.

Problem 7: Wrong Measures and Incentives

A major internal challenge for the retailer can be its organizational design and HR support. People are fundamentally motivated based on how they are rewarded. However, merchants and pricing departments may be measured against completely different success criteria that are working against each other. For example, when Pricing strives to maintain a company’s value proposition by driving towards a CPI index, this may run counter to the gross profit targets set by merchants. Progressive merchant leaders, with the support of HR, need to bring these departments together with aligned KPIs and metrics. Driving EBITDA should be everyone’s goal. Organizational structures and compensation schemes should encourage productive and aligned behaviors.

Coming Soon

We’ll show you what to look for in a competitive pricing platform in our next blog. Stay tuned!

02 Jan 2018
pricing

Pricing News: Engage3 is Harnessing Competitive Intel and Consumer Science

This post is part of our new Future of Retail series which interviews the leading founders and executives who are on the front lines of the industry to get a better understanding of what problems the industry is facing, what pricing trends are taking place, and what the future looks like. Read the article in the Disruptor Daily News here.