What motivated you to develop a platform for price optimization?
Mega-industries that work with perishable inventory and high market volatility; like travel, retail, cinemas and entertainment; perennially face a common challenge – ‘Pricing’. For example, the Indian travel industry (airline, railways, buses) bleed over $25 billion in revenues annually due to untimely + uncompetitive pricing. Similarly, Cinema theatres in India operate on less than 25% annual occupancy rate again losing over $35 billion annually because of fixed/flat cost-plus pricing models. Retail sector on the other-hand has seen a mega shift from stores to digital selling channels, resulting in 100% price transparency for the customers, making it easier to build a ‘price perspective’ about a brand and even shift their brand loyalties. All these sectors are leaking revenue, which can be easily plugged by right pricing strategies, and tools for automation.
‘Right Price’ setting is one of the most crucial problems in businesses, because any price setting error directly results in lost profit and lost customers. However, traditional price management methods by businesses almost never achieve optimal pricing because they are designed for traditional environments, where the frequency of price changes is inherently limited and the complexity of pricing models is constrained by the capabilities of off-the-shelf tools and manual processes.
This led us to build cutting edge AI powered dynamic pricing products for retail, ecommerce, airline, luxury bus coaches, railways, television and cinema industries. Here I would like to highlight BRIO which is our fully automated and intelligence pricing product for retail. BRIO allows organizations to add dynamic pricing tools into their systems. It allows retailers to position their pricing and discounts such that they could meet their growth goals without relying too much on discounts or burning a hole in their pocket to get rid of non-performing assets. That was the start of our journey of offering dynamic pricing solutions.
Price optimization is one of the most critical concerns faced by businesses; what are the major changes and challenges confronting the retail sector amid the second wave of the pandemic?
The pandemic has created significant pressure on companies across sectors. The retail industry has not remained unaffected. In fact, it is amongst the one that has witnessed massive challenges as supply chains got severely disrupted. This created a volatile environment that still continues to put humongous amounts of pressure on both pricing as well as the ability of organisations in managing risk and securing business continuity.
The adoption of digital channels and retail becoming more omnichannel has created a great need for pricing discipline to reduce costs. Here dynamic pricing comes into play as it ensures that consumers receive real-time price updates and enables businesses in being more proactive when looking at market disruptions as well as seasonal trends to meet the expectations of customers in a much more efficient manner. This kind of price optimization can be well managed by with the right software using a single platform for data ingestion, analytics and ML deployment. More than ever the retailers have to now maintain competitive pricing, create and implement effective promotions and customize store-level assortment to revolutionize their decision-making process.
How does Sciative take this pandemic to lead India to the price revolution?
Covid-19 has brought more price transparency in the market. Customers have become more cognizant and more options are now available across D2C and e-commerce platforms. The price education that people have gained during the last 1.5 years of the pandemic is unmatched. This new consumer behaviour will not change as people have become more price sensitive and are open to experiment. Thus, there is an accelerating need for technological upgradation due to the exponential rate at which people have started shopping from online platforms. This is bound to change the way companies do business and eventually result in them coming up with new formats of retail.
The need for a dynamic pricing is on the rise with the increase in digital awareness and thus, price revolution is slowly but gradually making its place in the Indian market.
USPs that distinguish Sciative from its competitors?
The features that distinguish Sciative from others are-
- Unified Solution - One solution for pricing, promotions, inventory planning, marketing planning, and CRM. Customers will find it easier and more cost-effective to operate with a single solution rather than many systems for varied analytics needs.
- Industry Agnostic- Apparels, Shoes, Handbags, Groceries, Electronics, Bus Tickets, Air Tickets, Logistics services, Advertisement slots, Cinema seats, Health Care Products, Financial Services, and much more are all powered by our tech stack.
- Superior scientific algorithm - Self-learning Artificial Intelligence algorithms that can be performed and executed without the need for pricey data scientists.
- Auto-AI/ML at massive scale - More than 3 billion price decisions are made every day using our products. Organizations have an excess of data — data about customers, competitors, supply, distribution, and logistics, programmatic marketing, various distribution partners, and so on. Extracting relevant insights in such a situation is tough, expensive, and time consuming. Our technology provides comprehensive insights at the press of a button, enabling enterprises to act quickly, adapt quickly, and make data-driven decisions.
The price war was a key source of concern for businesses before we entered the dynamic pricing space. When one party lowers the price of a product or service, the other feels obligated to follow suit, resulting in price wars. This is where we come in to help fix the situation. Taking an example from the travel industry- while determining the price of a bus seat, our algorithms consider 83 dimensions, one of which is the price of the rival. Other aspects such as the type of bus, the route it takes, customer behaviour, and so on are also taken into account. In retrospect, price optimization promotes healthy competition.
What are your future plans? Can you mention a few of the pipeline products?
In this fiscal year, we are particularly eager to offer products in the cinema and aviation sectors. While dynamic pricing in Airline is a well-accepted norm, I would like to highlight our Cinema product PRICENA. Fixed pricing will be disabled in the cinema theatres completely. PRICENA is being piloted at a leading cinema chain in India. In the coming future, movie hall ticket price will adjust automatically by AI bots, based on relevant parameters such as the director of the film, leading casts, social media views and downloads of songs and trailers, music genre, the duration of the film, catchment around the hall, past booking patterns, competitive prices, and many more. India as a nation eats, breaths and lives cinema.
Going to cinema halls is a beautiful experience. Exactly how Uber transformed the cab industry with dynamic pricing, we aim to disrupt the cinema theatre industry by disrupting and expanding the TG for this sector with ‘right pricing’. In near future experiencing a luxury theatre for a college going student group will be highly possible, without drilling a hole in their pocket!