Brands4friends has automated pricing for its entire assortment with AIR Dynamic Pricing from Prudsys, part of GK Software Group. With help of the AI-based solution, the online shopping club for designer fashion and lifestyle was able to increase its average margin by three percentage points.
For price calculation, the software takes numerous influencing factors into account. These include, for example, current demand on customer side, actual stock levels as well as a target date for complete sale of the goods. The solution thus simplifies the complex pricing process and enables management to concentrate on strategic pricing decisions.
Finding the best price on a daily basis
Brands4friends offers its customers frequently changing sales events from the worlds of designer fashion and trending brands, leisure and technology as well as home and garden. In total, its product range comprises more than 200 thousand items, including variants, for which best possible prices have to be determined daily.
AIR Dynamik Pricing uses artificial intelligence to calculate product prices on a daily basis with the goal to optimiser the combination of sold quantity, turnover and margin is achieved. The solution applies different pricing strategies depending on segment, product group or brand. By means of simulation, the shopping club can check possible effects of a new pricing strategy without risks.
The short life cycles of fashion goods require flexible pricing. In order to sell the products at full price as long as possible, the algorithms primarily take the current demand into account when determining prices at peak phase. Towards the end of a product’s life cycle, the aim is to sell off items completely by a target date. The software considers current stock values as well as target sale date and changes product prices according to demand. In this way, it ensures that there is no remaining stock on the desired date. Additionally, it achieves gentle price corrections at an early stage so that the margin is protected.