Machine learning applied to price optimisation

Request a demo


Profile picture for user Angela de la Vieja

Angela de la Vieja

Machine learning forms part of our daily lives. It’s present around us almost without our noticing. One example of this is Netflix. This platform learns about what we like to offer personalised recommendations and achieve increased user engagement. Beyond personalisation, machine learning can also help companies optimise their prices to increase sales. Want to know how?

Machine learning is based on the idea that systems can learn from data, identify patterns, and make decisions. Its implementation in pricing software allows it to predict variations in supply and demand based on historical data and anticipate actions that will be taken by the competition. This data makes it easier for eCommerce businesses to adapt their prices to the needs of the market at all times, in order to boost their sales growth.

Continuous and automatic learning is the key that makes it easier for companies to launch dynamic pricing campaigns. For these to be effective, our artificial intelligence must learn, not only from the sector and the competition but also from the decisions that the company itself has made in the past. These decisions will be taken into account in the present when considering new price changes, thereby reducing the margin of error while optimising sales.

What do I need to start optimising my prices?

To successfully implement a pricing system, you should follow this roadmap:

  1. Define the information that you need to analyse. Tell the program which KPIs it should base its analysis on to recommend the best ways to optimise your prices. This includes information about the sales history, the complete catalogue of products, promotions, marketing campaigns launched in the past and their results, customer reviews, stock data, and your main competitors, among others.

  2. Identify your objectives. In addition to increasing your sales, what do you intend to achieve by optimising your prices? Machine learning can help you to define future personalised campaigns to earn the loyalty of your best customers, for example, or to improve your conversion rate. This is another way to work on your sales in the medium to long term.

  1. Start with your star products. To allow the system to begin learning about your company and catalogue, we recommend you start by asking questions about the products or services that have functioned very well in the past. This incorporates quality data which the system can base new predictions on and begin adjusting prices to tendencies in the market.

The main advantage of implementing a pricing system based on machine learning, in addition to its speed, is its capacity to analyse a large amount of data. These systems can simultaneously and automatically compare the prices of all of your competitors by tracking their websites, online stores, and social networks to obtain quality information about their products and services.

What you should remember is that the ultimate goal of machine learning should be to enhance overall customer satisfaction. These are the users of our eCommerce business, on whom the success of our company ultimately depends.

Related Articles


Consumer behavior: How can behavior tracking be effective for setting the right pricing strategies?

Behavior tracking is becoming massively popular today. As a result, pricing strategies born from studying consumer behavior are a merchant's dream come true. If done right, it can conquer every market for the business quickly. With abundant data available, the strategic makeover of the pricing models is becoming easy for companies. 

What is behavioral tracking, and how is the data beneficial in pricing?

For a quick understanding, behavioral tracking refers to gaining in-depth knowledge and insights into consumers through their web data. Their browsing habits, spontaneous decisions, shopping interests, and preferences come under behavioral tracking. 

How can enterprises use customer behavior data?

Companies can use customer behavior data as a tool to strengthen their hold on the market. A customer’s preferences, values, and tendencies allow businesses to work in sync with them through the collected data. Apart from this, customer behavior can also aid in:

Tailoring customer needs for customer retention

Personalization is becoming the heart of a company’s growth. No matter in which area an enterprise is functioning, tailoring the services, products, and solutions is becoming increasingly crucial. Uniqueness and personalization attract the crowd like no other. 

Increasing the overall value

One of the best ways customer behavior data affects a business is by upgrading the value of customers for the business. The customer’s characteristics allow the company to target the people that match the business prospects well. 

Optimizing every type of content

Everything that is up for digital display requires content. You must have seen companies unveiling their products or services through advertisements and making the initial public appearance. Two essential sales strategies – upselling and cross-selling comes through content optimization.

Pricing Strategy

Last but certainly not least is the influence of customer behavior data on the pricing strategy. The pricing strategy essentially constitutes content derived from data analysis. Companies need to have a dynamic approach to the pricing system to attract the right customers. 


Saint Valentine’s Day, always a good opportunity

V-Day is looming, a long-awaited date for all and also a good occasion for the eCommerce. According the study conducted by Prosper Insights and Analytics, it is forecasted the average consumer expense that day will be the highest in last years. Furthermore, 25% of them will buy online, which means an increase of 4% regarding 2014 (The US department of Commerce). This is, therefore, a key date where market competitiveness increase and which could be assumed as a big opportunity for our business or, a big fail if we do not adopt the correct strategies.

How to turn this event into an opportunity? To achieve this goal, we need to adapt our prices to this hostile environment, i.e. we need to develop an appropriate Dynamic Pricing strategy that allows us to adapt our prices to the variations produced in supply and demand and to position us ahead of our competitors. In V-Day, the frequency in changes will be higher, carrying it out each hour or even each minute. It is estimated that 65% of leader retailers have the ability to respond quickly at these variations, such Amazon. For this reason, it acquires great importance the correct use of a software specialised in price motorisation of competitors. Do not miss the time and adapt your business to new adversities.


Which are the best footwear marketplaces to sell on?

Footwear marketplaces are booming. The last decade has seen the launch of new specialized marketplaces with millions of different users. Among them are Spartoo, Sarenza and Farfetch, portals with international reach. Their main value is that they unite hundreds of footwear brands, as well as offering clothes and accessories. Although each has its own characteristics, they are all vertical marketplaces, i.e., they focus on a specific area, and their sales categories are interrelated. For sellers, these portals provide an opportunity to expand sales channels and drive the globalization of their e-commerce business. We explain how to sell on these footwear marketplaces so that you can assess whether they align with your plans for the future and then start defining a possible pricing strategy.