Podcast | The power of price data and search with Weldon Whitener

11 Feb 2019

The power of price data and search intelligence

This month, special guest Weldon Whitener, ex-Head of Pricing at Amazon, joins us to discuss the intelligence gap between visibility and price when trying to improve conversion rates in a competitive online space.

We explore:

How pricing strategies have been built in the past, and why this is changing
How brands can use pricing data and search data in tandem to enhance their pricing strategies
How brands can save time and scale their pricing strategies
Weldon's expert opinion on creating a competitive online pricing strategy

Now available on Apple podcasts and Spotify.

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Weldon W. Whitener, PhD has spent nearly a decade helping companies drive actionable insight from data. Starting his career at BCG, Weldon next held the position of Head of Pricing for Amazon, UK before joining Pricesearcher as its Chief Analytics Officer. Weldon's mantra is to always put the customer first & knows from experience that having the right pricing strategy is a key factor in achieving aspiration.

If you’d like further insight into how search can aid pricing strategies, don't hesitate to get in touch.

AI Transcription

This podcast has been transcribed using an AI transcriber. There may be some errors and this is not a substitute for listening to the episode.

Emily Hogarth 0:02
Hi, welcome to Elevate that podcast from Pi Datametrics with me Emily Hogarth

Louise Linehan 0:06
And me Louise Linehan,

EH
where we'll be discussing the hot topics across search alongside some of the industry's best thought leaders.

LL
This week, we've got a special guest Weldon whitener from Pricesearcher, joining us to discuss the importance of building an efficient pricing strategy with price and search data.

EH 0:24
Hi, well done. Thanks for joining us today.

Weldon Whitener
No, thank you for having me.

EH 0:28
Can you tell us a bit about your experience at Amazon? And as well as your role at price searcher?

WW 0:32
Sure, absolutely. Um, so my previous role at Amazon, I was the head of pricing, which ultimately meant that I was the voice of the customer. So I would kind of obsessed around making sure that Amazon was positioned in the right point to make sure that the customers always had the best value. Because customer trust is a lifetime of basically good choices, and can be broken literally at a moment's notice. So we were just obsessed about this day in and day out. So once I left Amazon, I took this learnings, this became basically part of my DNA to always think about what the customer wants, and what the customer needs, and a price searcher, I'm able to work with even larger amounts of data across multiple retailers. And what I've been able to do is take this information that I learned from from Amazon, and basically apply it across the board for all of the retailers and help educating them on how they can provide the best value back to customers, which ultimately gives a better platform for customers to make the, I guess educated purchasing decisions.

LL 1:26
Can you tell us a bit more about Pricesearcher? How does it work? And who is it for

WW 1:30
sure, absolutely. So Pricesearcher at its core is essentially a search engine. So our mission is to index all the world's prices in one place. The way that we've done this, essentially, is by partnering with, you know, a variety of different kinds of verticals, so retailers, merchants, marketplaces, etc, have basically aggregated all this information, what we want to do is we want to take on as much data as possible, because we think that's ultimately what customers want. So by doing this, we're able to kind of curate probably the largest data set of products in the world, which we think is going to be highly valuable to consumers in the end.

LL 2:03
Okay, so it's used by customers and brands, both sides of the coin.

WW 2:07
Yeah, absolutely. So I think from from the, from the brand side, you know, being able to have free traffic to their brands to their websites forever is our core proposition.

EH 2:17
So from your experience, how do brands and retailers build their pricing strategies currently? And traditionally?

LL 2:25
Yeah, great question. There's all kinds of ways that they do it, I'd say traditionally, most people would, it was a very kind of gut instinct approach, they would say I, what's my cost for this product or item, add some sort of margin on it, or I'll say, I think it roughly should sit within this, this hierarchy of pricing. So that was kind of the previous for me then start to get to, you know, where people sort of add in a little more of kind of elasticities and things like that to say all well, if I raise the price by this much, my demand will decrease by this much. And you got to have these really nice kind of succinct formulas to decide where you want to set your prices. However, with the advent of ecommerce, that space has started to be disrupted quite quickly. Because the paradigm of I'm a consumer, I walk into the store that I want to go into, and then I build a basket around that stores products no longer exists because the friction between moving across retailers no longer exist and on the internet, because it's just a couple key strikes strokes away. So what that means is now if a customer say wants to purchase an iPhone, they say, Okay, I want the new iPhone x are or something along those lines, they then go and figure out which retailer provides the best value to them. Because of that, it means that these kind of elastic cities and kind of cost based pricing doesn't work as well, because customers will just navigate to whoever they think is the best. So trying to moving away from these traditional pricing strategies to kind of the more dynamic, you know, quick real time decision making is where I think most benefits going to come.

LL 3:49
Tell us about your crazy pricing anecdotes.

WW 3:53
Um, yeah, so I've worked with a couple companies. And they there was one really interesting kind of anecdote that that came across me where the company would offer a bounty for people that could find a price cheaper at one of the competing retailers. So what it essentially created is all the pricing team would basically just wait for their competitors to move their price down, claim the bounty because I think it was like 5% of the difference or something. And then and then change the prices. So it ended up creating this little cottage industries of all the private pricing people basically just waiting for someone to move the price, claiming the bounty really quick and the price down. So they figured it out very quickly after about one Black Friday that that's probably not going to work out. To change that out

...

LL 4:47
So, it's crazy to think that pricing teams would manually go into stores, and look at prices of similar products themselves and kind of know it down. You know, that's why it's so important to have liked data at your fingertips to be able to build efficient pricing strategies. So a Weldon, we work with search data, how can search data and pricing data work together efficiently?

WW 5:12
Yeah, absolutely great question. The harmonization of pricing data and search data or traffic is literally I think the the gold standard of what any retailer or brand wants to have on their kind of, and their analytics kind of repertoire. The reason I say that is is pricing, let's say you have a brand or retailer that offers 50,000 products. Now you could now say All right, now how does that product set in the market? Am I more expensive, in my less expensive mind the right place? That's great and all but that's kind of a uniform distribution. Basically, there's no prioritization of which products are most important. Now, what you can do is then overlay that with search data and traffic data to say, Well, actually, out of those 50,000 products, 10,000 are the most important that's getting 80% of page views. So therefore, I as a brand or retailer want to make sure that I'm building that strong pricing perception and giving that value to customers so that they when they come to the website, they see that I'm in a good position. So I focus, you know, tirelessly on those 10 that 10%, which garners 80% of the views. But because I've now one that I've basically helped the customer see that I am there to give them a good value, then the customer build the basket around those products, and then they'll maybe purchase some of the longer tail products. And that's where you get the upsell where a lot of profitability will come from.

EH 6:25
According to a poll taken by Omnia retail, UK retailers lose roughly 1.97 million hours each week on competitive pricing checking, how can brands save time and scale their pricing strategies?

WW 6:41
Yeah, absolutely. Just huge amounts of time is not wasted. But is is maybe misspent, that could be kind of directed towards more value added opportunities. The main thing around this piece is around having the right data and then automating that business decision. So what I mean by the right data is being able to to ingest, you know, traffic data search data, things of this nature, that basically helps you prioritize which products you should be looking at. But then on the flip side, being able to ingest pricing data, kind of understanding what other retailers are selling the prices that are setting their prices at how other brands are pricing their products. And by by basically pulling these two together, you get a synergistic kind of model where you you're able to make very quick dynamic pricing decisions based on customer search patterns. And that would save huge amounts of time, the way that I kind of think about as like long term financial planning, these things should work in the background, you kind of put, you know, 10,000 pounds and your bank, and then you forget about it for four weeks at a time, once at a time, this should be the same for kind of pricing and that you should build, you should get the right data and you should build the processes. And then every once in a while all of those processes to make sure that they're still working as desired. And then focus on other things in the business rather than spending huge amounts of man hours just kind of doing this tire list price check in or kind of reviews of search traffic and stuff like that.

LL 7:59
Okay, so I've got here in front of me, 96% of UK retailers have a pricing strategy, but only half based on competitors. So Weldon, what would your expert opinion be on creating competitive online pricing strategy?

WW 8:14
Yeah, I think it's great. So it's almost kind of what I what I mentioned earlier is that now that we live in kind of the e commerce space, where the friction to move from one retailer to the other is almost is almost zero. You know, even the big brands struggle with, with customer retention, with basically brand loyalty. Because even if you're like the biggest guy on the street, you have great offers, you have great fulfillment, if you're not at the table in the discussion, so if you're know, 10, 15, 20% off the price point, customers are going to say you know what, I'm willing to take a point on this guy.

LL 8:44
So you need like a complete holistic view of like all of your competitors, you can't just go in there and be like, I think this this guy's my competitor. I know they sell fairly similar products to me. But that's kind of not what you should be doing anymore. You need like complete visibility over like everything going to get the best is

WW 9:01
absolutely couldn't agree more. So yeah, I think it's so much of the old paradigms like oh, well, I sell, you know, tools. So the only people going to look at our other tool sellers. But the issue is, you know, as retailers get bigger as e commerce giants grow and expand, people are going to be moving in and out of different verticals all the time. So if you only focus on two or three, you're really missing the whole landscape of what consumers are also looking at, because a consumer might say, all right, well, I want to buy a tool, but I'm going to buy it from books world because they haven't have screwdrivers. Now if you were to world, you'd say oh, well, you know, that's outside of my purview. I don't really care what they're doing. But the customer doesn't care what the title they care, you know what the proposition is to them. So having that full holistic view is really what's going to separate yourself from you know, having a winning strategy and having maybe a strategy that's maybe led by incomplete information.

LL 9:53
If you like what you had today and would like more information on the combined power of search and price data for building the most efficient pricing strategy, don't hesitate to get in touch. You can email us via [email protected]. Get us on Twitter @pidatametrics, or contact us via our website.

EH
And if you have any more questions for Weldon, you can connect with him on LinkedIn. Just search Weldon Whitener. Thanks for listening and have a great week.