In the market to buy some new headphones? As a consumer you can scour the ‘net whenever it’s most convenient, find the best priced products anywhere in the world and have them delivered to your front door. It’s a great shopping experience but it’s created a world of complexity for retailers.
Just ask Aussie Hi Fi, an audio visual specialist based in Brisbane that opened one of the first online stores in its sector in Australia. As ecommerce and marketing manager Casey Jones explains, digital price transparency has turned the retail battleground into an all-out price war.
What’s missing for most retailers is the ability to see what’s happening in the market at a meaningful level and to know when and how to respond quickly to changes to improve key growth metrics like market position, volume, sales revenue and margin. Providing that visibility is what data insights company, Invigor Group, does best.
COO Claire Mula says Invigor, listed on the ASX, is an Australian-based data intelligence company delivering innovative solutions for B2C businesses. Focused on turning data into dollars, Invigor helps businesses make better decisions and influence future growth metrics based on a complete knowledge of who their customers are and the competitive landscape they operate in.
Invigor’s success is both an art and a science. Whilst it works with customers to develop complex algorithms from rich data sets like products, price, promotions, transactions and others – it combines deep retail industry experience with local support and Invigor’s own proprietary data sets to deliver the “so what” in analytics, which has led to its success in Australia as well as high demand for the solution sets in Asia-Pacific and Europe.
The evolution for Invigor is to help clients move from historical and real-time data analytics to predicting future outcomes and understanding how best to influence them using the latest in AI.
“We continue to make significant investments in data and machine learning models that help us to not only understand what’s happened or is happening in real-time but what may happen in the future, and what our clients need to do to make it happen,” Mula says. “For example, we are getting to a point where we can deliver sales volume or margin uplift predictions based on future pricing or promotional plans and for specific customer segments at scale, and this is in part what drove our decision to partner with Microsoft.”
Beyond price wars
Invigor has a number of products but chief among its arsenal is SpotLite, a tool designed to monitor online product listings in real-time and provide analysis into merchandising strategies so retailers and brands can better understand their competitive or channel landscape. This helps them to get on the front foot particularly with pricing and promotional strategies, to make more informed decisions and have more meaningful dialogue with their channel partners ultimately improving sales volume, value and margin.
“We’re the only Australian company providing this type of competitive data-driven optimisation to retailers and brands,” Mula says. “It’s far more granular than you will get from traditional competitor data sources. We’re able to monitor any product, in any category, in any market across the world, on an hourly basis. Retail is very local so we also provide local support with experts in the retail industry. It gives clients a more accurate view of what’s happening with their products, where and how they should play, and what they can do to increase margin while remaining competitive”
SpotLite has been a revelation for Aussie Hi Fi. While it had been price tracking before using the tool, previous methods weren’t nearly as accurate and real-time as SpotLite, which also provides deep insights into their positioning in the market.
“We hadn’t been able to tell if we were the cheapest, or by how much,” Jones says. “Preserving profit margin is as important as being competitive.”
Invigor recently moved SpotLite onto the Microsoft Azure cloud in order to take advantage of its analytics and machine learning capabilities. With a plan to focus on International expansion, a robust and powerful platform was essential.
Invigor Marketing Director Camila Lima says: “We’re trying to take our customers on a journey that starts with understanding competitor pricing and promotional strategies and ends with more profitable growth strategies.”
“Knowing how influential competitive behaviour is on sales, we want them to shift to more automated, intelligent ways of making price or promotional decisions, rather than just reacting to price drops. It’s really shifting from repricing to building pricing models using artificial intelligence.”
Marcy Larsen, Retail Industry Lead, at Microsoft Australia believes Invigor are a prime example of a business that is taking technology by the horns in a time where disruption in the retail industry is at its peak.
Larsen said, “In today’s ultra-competitive environment speed to market, and agility are often the keys to competitive advantage. Whether it be adapting pricing strategy, or tinkering with algorithms and data sets to manage customer loyalty speed will become the key battleground and the cloud is the best weapon to win that battle”.
From a product development and innovation point of view, Mula says choosing Azure was a no brainer. She sees its analytics and machine learning tools playing an important role in Invigor’s future.
The business has already moved another product – Shopper Insights, which uses data to segment customers and make segment-based engagement recommendations – onto Azure. It’s working to make customer engagement and loyalty even more powerful with AI.
“A lot of our customers are extremely sophisticated. They’ve been investing in dynamic competitive intelligence for some time and some are already building their own models,” Mula says. “They’re ready for the next phase of applying data science and automation based on understanding the influence of competitors on their sales and business at a more strategic level.”
The other main benefit of working with Microsoft is the broader commercial opportunities that stem from its partnership. Invigor is already working on product development with a US-based Microsoft partner, Neal Analytics who was Microsoft Gold Partner of the Year 2017.
For Aussie Hi Fi, the key benefit of SpotLite has been staying competitive. Staying competitive means ensuring a quality product at a price that represents value for money. “It’s important to us that we aren’t just trying to be the cheapest product all the time. We see technology as an enabler for greater customer value, it may be a more competitive price but also it may be simply understanding the customer more both in-store and on-line”
Jones is now looking to provide insights from SpotLite direct to his customers.
“We’ve already shopped around for them so we are confident that we’ve got the best price” he says. “Ideally, we want customers to see real-time price comparisons whether that’s in-store or on the website which frees them up to take into account quality and functionality, which are also important considerations when it comes to value for money.”
“Since we flicked the switch on SpotLite it’s been absolutely incredible. AI will just allow us to do this even better.”