Determining the ideal price for an item is often extremely difficult for Internet retailers, who operate in a global environment where consumers can quickly shop around for a better price, said Victor Rosenman, CEO and founder of Tel-Aviv based Feedvisor.
“For retailers to stay relevant in today’s market, there is an urgent need to adopt a dynamic pricing strategy that reflects ongoing changes in market conditions and the competitive environment,” said Rosenman. “Consumers are far more sophisticated, prices are more transparent, and online retailers simply cannot sit still and wait.”
On Monday, the company announced that it had closed a $5 million venture funding round led by Square Peg Capital. This latest investment follows a $6 million Series A funding round in August 2014, and brings Feedvisor’s total raised capital to date to $13 million. The round also included participation from existing investors JAL Ventures and Titanium Investments. The company will use this capital to continue accelerating growth and global business expansion, including opening offices in the US, Feedvisor said.
Speed in product pricing is what Feedvisor seeks to supply to hundreds of customers around the world with its Algo-Commerce (as in algorithm-based) platform that allows them to quickly and nimbly change prices for online products in response to changing market conditions. In Algo-Commerce, hundreds of thousands of data points are analyzed in real-time to determine the precise point at which customers will pull out their credit cards and make a buying purchase.
Those data points could include any number of applicable criteria – like the time of day (customers who shop in the morning are more price-conscious than those who shop at night, statistics show), whether any holidays are coming up (customers may delay their purchases until then in the hope that items will go on sale), weather forecasts (a nice day may mean that a website has to compete with brick and mortar stores), and much more. All those factors go into a pricing decision – with any downward price cutting into profit.
There are other pricing solutions that take into account those criteria as well, but they are not the big data automated solution Feedvisor is.
“Feedvisor does not require any pricing rules or business rules to be set up,” said Rosenman. “This saves hundreds of hours of setting and resetting rules, removing conflicts, and testing pricing scenarios, and removes all risk of human error.”
Besides that, the system helps retailers accomplish their greatest goal – moving the merchandise. Retailers need a constant supply of new goods in order to keep customers interested, but to make way for the new they have to get rid of the old. Merchandise that doesn’t move eventually gets relegated to the back pages of a website, and to get rid of it, retailers often have to take a loss.
That loss could be considerably softened using Feedvisor, the company says; the system can determine, based on data from other sites and the customer mix of a site, what the ideal price for the product is, and even recommend how to run a special on it, to encourage customers to spend.
The Feedvisor site is chock-full of testimonials from satisfied merchants, and the company has won a slew of awards, including the Red Herring Top 100 Europe award for 2014, which recognized the year’s most promising private technology ventures from the European business region.
“The global e-commerce market is growing rapidly and has already exceeded $1 trillion in gross merchandise sales, with pricing being one of the top challenges,” commented Dan Krasnostein, partner at Square Peg Capital. “We are thrilled to support the Feedvisor team as they continue to provide this invaluable solution to their rapidly expanding customer base.”