Stop Competing Blind: The Secret To Real-Time AI Pricing - Peter Sheldon | Why Delayed Pricing Hurts Sales, What Makes Product Matching Hard, How AI Agents Watch Competitors, Why Manual Scraping Tools Break, What Pricing War Mistakes To Avoid (#487)

00:00:00:01 - 00:00:17:11 Unknown The million dollar question here is, well, how many competitors do I have? Who should I be watching? Pricing was is definitely a thing out there. So what are the biggest mistakes when brands reacting to their competitors?

00:00:17:12 - 00:00:38:22 Unknown Hello! Welcome to another episode of the E-commerce Coffee Break. Imagine this your biggest competitor drops their prices overnight. By the time you notice a react, you already lost sales and revenue.

That's what competing blind looks in e-commerce today. The market moves at fast, speed, prices change, daily promotions launched constantly, and yet many brands are still making critical decisions based on outdated reports and gut feeling. 00:00:38:22 - 00:01:06:00 Unknown So today, we're diving into how smart e-commerce teams are solving this by using real time data to protect margins, move faster, and make better decisions. To break this down, I'm joined by Peter Sheldon.

He is the co-founder of Shopvision.ai, a competitive intelligence platform that tracks hundreds of thousands of e-commerce brands and retailers in real time. Before launching Shop Vision, Peter held senior roles at Forrester Research and Adobe, where he advised some of the work largest retailers on e-commerce strategy. 00:01:06:01 - 00:01:27:11 Unknown Peter, great to have you on the show.

Yeah, thanks for having me, Claus. Great to be here. So let's jump right into it. How are brands losing money because of bad or delayed pricing decisions?

There's two sides of the equation on on the brand side, brands have a lot of issues with their wholesale distribution partners, their reseller channel, maintaining their map policies. 00:01:27:13 - 00:01:52:13 Unknown There's a constant game of really whack a mole, making sure that, you know, all of the predominantly online resale channels are adhering to those map policies, and it's just a constant game of finding that some of their top selling products are being heavily discounted when they shouldn't be.

So I think that's the, you know, the biggest challenge. And it's really sort of it's not just maintaining the margins and sort of having the challenge of that margin erosion through the channel. 00:01:52:13 - 00:02:18:21 Unknown It's more around their overall sort of brand perception. You know, if they're a premium brand, they want that to be consistent across the whole sort of ecosystem where they're represented and finding their top selling products heavily discounted is a major brand issue for for the company.

So I think that's it on the brand side. And then on the retailer side, yeah, you know, you've got to monitor, you know, how the same products or similar products that you sell are being sold by your competitors. 00:02:18:21 - 00:02:37:08 Unknown And if you're overpriced or underpriced, it's going to have, you know, either an impact on yourself through or an impact on your margins. I kind of mention from the brand side, that's clear.

Normally you have like a minimum price that you can resell, and if you undercut this, then obviously you're already in trouble by contracting. But I want to go into the retailers now. 00:02:37:08 - 00:02:54:18 Unknown There's a lot of moving parts nowadays. You have social channels, you have different marketplaces, you have your own website, and your competitors are on all of these places, which obviously makes it very difficult to track what's happening there.

So why is it so difficult to to get an overview of what's happening in the market? It's very difficult actually. 00:02:54:19 - 00:03:13:19 Unknown It seems like on the surface, which would be an easy problem to solve. But I think like a lot of these things, there's a huge amount of nuances and, you know, a lot of edge cases that actually make it very difficult to solve.

So there's sort of two types of retailers. There's a retailer that is competing with other retailers who are selling the identical same products. 00:03:14:00 - 00:03:29:15 Unknown They all have the same suppliers, they all have the same vendors. And on theory, it should be very easy to go to Google Shopping, get a feed and say, you know, this is the universe of everyone else is selling the same product.

But I think it's the last part of that sentence that's really critical. It's finding the same product. 00:03:29:16 - 00:03:54:01 Unknown And so when we're technologies like shop Vision and many other vendors that sort of play in this space, when we're trying to sort of map a product that I'm selling to a product that a competitor is selling, well, how do we know that it's the as that same product? And historically we've relied on identifiers, scolds Athens.

But the thing is, as we're doing web scraping and we're trying to look across the internet and see, well, who else is selling the same products that I'm selling? 00:03:54:01 - 00:04:13:02 Unknown It's a lot of the sellers don't even publish or put on their websites those identifiers, and if they do, sometimes they're not accurate. They're not they're at all they're different. And so then we have to fall back to other attributes.

You know, the product name, the description, the images, all of the attributes. And it becomes very difficult, especially in apparel where you've got all these different sizes and colors. 00:04:13:02 - 00:04:34:12 Unknown And you might have, you know, what seems on the surface like the identical same product, but it's actually not because the different fabric or there's two different styles of black, there's a light black and a dark black. And so you get the matching wrong.

And all of a sudden you've made the wrong assumptions and and you think, oh gosh, well, my competitors selling this at 20% less than we are, but that's only that. 00:04:34:12 - 00:04:55:22 Unknown You have to be very, very confident that it's the is that same product. So I think that's the hard part of the problem is what we call sort of the matching problem. If you can solve the matching problem and have 100% confidence that you that you're comparing, like for, like when you're doing your price analysis.

No, no, the job becomes much easier because now you can see, okay, we're either overpriced or underpriced compared to our competitors in the market. 00:04:56:00 - 00:05:29:12 Unknown Very interesting. Now obviously beside of the product, there are other competitor signals out there. Which one should you watch every day?

The million dollar question here is, you know, well, how many competitors do I have, you know, who should I be watching? And I think that, you know, the key thing is monitoring the marketplaces. So whether you have a direct first party relationship with Amazon or you have a third party relationship where it's sort of an authorized reseller who's selling your products on Amazon, but then someone else, you know, a, you know, call it a gray market seller, you know, maybe selling on Amazon as well.

00:05:29:13 - 00:05:53:07 Unknown And so Amazon is sort of, you know, the first place, and you may often find the same products that you're selling significantly discounted on Amazon. But again it's sort of like understanding the why, you know, are all those, you know, Amazon sells both new and used products and a lot of the time sort of understanding the products on Amazon, who are the sellers and so forth. 00:05:53:11 - 00:06:17:18 Unknown A big part of it is doing that discovery and sort of finding out, you know, everyone that's selling the same products that you're selling because it only takes one small, you know, kind of mom and pop shop reseller to drop that race by 50%.

And then Amazon may, you know, drop the price on their product by, you know, to do a price match and sort of, you know, when on the by button. 00:06:17:18 - 00:06:35:00 Unknown And so now all of a sudden, you know, if Amazon's selling at 50% less and you are well, you know, you're not going to get any sales because you know, so so I think, you know, go back to answer your question, you know, monitoring the marketplaces of Amazon, Walmart, eBay, etc. that's sort of job number one.

And then it sort of, you know, really kind of a long tail. 00:06:35:00 - 00:06:57:06 Unknown You want to sort of understand who you're most sort of top to. Your top ten competitors are your next 20 and then your long tail. But really you want to have eyes on, on, on the whole game.

Now, that seems like a job for AI because there's a lot of data points in there. But for our listeners that have not worked with market intelligence, I want to get an idea on how it worked in the past. 00:06:57:06 - 00:07:20:06 Unknown So how did brands track this? What are spreadsheets or what was the process?

Well, I think I think you've got different levels of maturity. You know, we see, you know, a huge amount of retailers and brands that still really don't do this at all. You know, their pricing strategy and any price changes that they make to their prices is typically a six month flea, even at best process. 00:07:20:07 - 00:07:45:00 Unknown You know, we talk to companies that are only changing their price, you know, once a year.

And you know, if they are doing. And a lot of that pricing comes down to margins and map prices they have to adhere to from their suppliers, etc.. And if they are doing any sort of competitive benchmarking, they're doing it on a manual basis, on a very manual basis, where it's a free or four week exercise for multiple analysts on the team. 00:07:45:00 - 00:08:03:00 Unknown Sometimes they, you know, outsource that, you know, to an agency in the Philippines or something to do it for them.

But it's a very sort of literally manual. You know, going through every skew, I have my list of competitors trying to, you know, go going to that competitor site, putting in the skew number into the search tab, seeing if there's any results, recording that price in a spreadsheet. 00:08:03:00 - 00:08:27:16 Unknown So a huge amount of the market is still doing it, you know, manually. And it's not scalable.

It's not reliable. And by the time you've completed the exercise, half the prices have changed already on those competitors. So again, it's a game a game of whack a mole. Then, you know, certainly more sophisticated larger brands that have sort of the resources have typically relied on vendors that do some level of automation.

00:08:27:16 - 00:08:46:07 Unknown And so they would create scraping tools and basically say, okay, we're going to go to your competitors website, we're going to scrape their website, and we're going to look for products that we think are matches. So we're going to match SKU code to skew code. And then we're going to go back, you know, once a day, once a week, whatever the frequency is. 00:08:46:08 - 00:09:11:14 Unknown And we're going to go and we're going to grab the price.

And if the price is changed then we'll create an alert. And it's a decision for the retailer. Do we want to match that price change? Well, here's the problem.

That sort of traditional process is very, very fragile. It only requires your competitor to change the structure in or JavaScript on their on their product detail pages, make some kind of change to their site, and all of a sudden that scraper breaks. 00:09:11:18 - 00:09:37:18 Unknown And historically, you know, a lot of companies that have used sort of prescriptive tools, it's been a very, very fragile process. It breaks out the time unreliable and increasingly sort of with the threat of opportunity and threat of AI, the retailers have become more and more sophisticated in terms of their anti scraping and, you know, sort of bot blocking processes where it's become harder for for vendors to do screen scraping and, and price scraping.

00:09:37:20 - 00:10:02:12 Unknown Now with shop vision you're going a different way and dive into this now. So how does AI overall change competitor tracking for e-commerce brands? Yeah, so we take a completely antic approach to this. We don't screen scrape.

We send an agent agent to the website. So effectively first of all, we use AI to determine who on internet are selling the same products that you're selling. 00:10:02:12 - 00:10:27:08 Unknown So we build a universe of who your competitors set are. And then we go to those competitor sites, but we go as as an agent.

So we're acting as a human being. We're going to that site where finding the match, and we're using the intelligence of the agent to not just look at codes and UPC codes and so forth. 00:10:27:08 - 00:10:49:00 Unknown We're doing image comparison. We're reading all of the technical attributes.

We're being 100% sure what the agent is creating, that assertiveness, that the product that we're finding on the competitor site is the exact same product that we sell. And then every day we're going but we're using the agent to sort of visually look, we're not sort of relying on a scraper to find a div in HTML. 00:10:49:00 - 00:11:10:09 Unknown We're sending an agent as if it was a human to the product detail page to visually read the page. And so we're looking for the price.

We're in the standing. If it's in stock of it's out of stock. And so it becomes a far more reliable and robust process because we're acting as a human would do. We're using the agent's eyeballs if you like, to visually read the price as opposed to.

00:11:10:10 - 00:11:26:05 Unknown And so if something changes on the page, it doesn't matter, as long as the price is still visually readable. And even if it's not, even if I have to click a button to reveal the price or something like that, the retailer's but some kind of mechanism in place to make it harder for bots? Well, if a human can reveal the price, the agent can reveal the price. 00:11:26:05 - 00:11:47:05 Unknown So it becomes almost to the point where we can we can get competitive pricing all the time on every competitor's website.

Now. Very interesting. And I think speed matters there when it comes to pricing. Can you give me an example of a brand?

You don't need to name the brand where you found out that the better pricing basically protected their margins? 00:11:47:09 - 00:12:13:09 Unknown Absolutely. The frequency of of detecting, you know, your competitors pricing becomes really, really important. So, you know, like I said, traditionally firms would do this very infrequently, maybe every six months, maybe sort of once a month.

It's a more mature. But the reality is you want to be doing this daily. And in the case of some of our clients, you know, they actually are doing it 3 or 4 times a day or even hourly, because that's sort of the dynamic nature of the market that they play in. 00:12:13:09 - 00:12:31:04 Unknown And so, you know, for most of the brands we work with, their their monitoring on a on a daily basis, and so they can react very, very quickly if a competitor, you know, puts a product on sale and does, you know, sitewide 20% off sale that's running for four days, we immediately know that and not just at the product went on sale.

00:12:31:06 - 00:12:48:07 Unknown We know that there's a promotion. We get all the emails and social posts and ads from from all of your competitors. So we actually know the context of the campaign, of the promotion of the offer. That's and that it's running for the next four days.

So now we can say to our client, to, to the brand, to the retailer, you know, do you want to react to this? 00:12:48:08 - 00:13:06:23 Unknown We know that these prices have been put on sale for the next four days. Is this something that you want to react to or not? And then on the flip side, you know, it might be that yes, your competitors have put these products on sale, but they only have the extra, you know, the XXL and the and the XL left in stock, you know, like it's kind of pointless.

00:13:07:00 - 00:13:28:16 Unknown Like, do you really want to put your top selling SKUs, the mediums and the smalls and the large is on sale when your competitors don't have those in stocks? It's all about context as well. You can't just blindly follow what the competitors are doing. You have to sort of understand the context of inventory, price, promotions, offers, etc.

to, you know, make the right reactive decisions to what your competitors have done. 00:13:28:18 - 00:13:50:22 Unknown It brings me to my next question. Pricing was is definitely a thing out there. So what are the biggest mistakes when brands reacting to their competitors?

It's a losing strategy to just blindly follow and to say, hey, because my competitors have have dropped the price, that that's something that I should do too. You need a very sort of articulated strategy about how you're going to react to competitive pricing. 00:13:50:22 - 00:14:14:00 Unknown One thing we see more and more is I call it sort of reverse map, but it's effectively the retailers may be following the rules of their suppliers and their, their, you know, they're within the the map guidelines and policies of their supplier.

But one of their competitors may be quote unquote, cheating and violating. And so it's now they're now they're not on unfair territory because they're sticking to the rules. 00:14:14:00 - 00:14:35:13 Unknown But a competitor isn't. So in this case they're not going to follow the competitor and lower the price, because then they themselves would be in violation of their agreement with their supplier.

But it gives them the power and capability to report that competitor to the supplier and say, hey, this isn't fair. My, you know, one of my competitors is cheating the system and they're selling this, you know, top selling skew on sale when they shouldn't be. 00:14:35:13 - 00:14:57:11 Unknown So that's an example of, you know, really sort of approaching it from the from a strategic point of view. I want to dive a little bit into Shop Vision itself, who is working within an organization, within a brand with sharp vision.

And how does the day to day work look like when you work with the system? We serve a number of different sort of personas or roles within an e-commerce organization. 00:14:57:11 - 00:15:19:15 Unknown We work a lot with the digital marketing team, so we empower a digital marketing team with tools to monitor really all of the campaigns that their competitors are running at, everything from the ads they're running on, the ad platforms, feed media, all of the social campaigns that they're running, all of the emails that they're sending, all of the promotions and offers that they're running, etc..

00:15:19:15 - 00:15:37:21 Unknown So, so we really empower the marketing teams to be better educated and designed better campaigns, because they can see both currently what campaigns their competitors are running. They can also see historically and say, oh gosh, last year, you know, for, you know, for Thanksgiving, this is what all my competitors did. This is the type of promotions they ran. 00:15:37:21 - 00:15:59:19 Unknown This is when they started their their campaigns, etc..

So that's one persona. We work very closely with the pricing teams, obviously, as we've been talking about. So the pricing teams, if I strategy teams, you know, giving them benchmarks, price ladder analysis so that they can be confident that not only they have the right price is set today, but they have the tools in place to be able to react to what their competitors are doing. 00:15:59:20 - 00:16:19:14 Unknown And then we work very closely with the merchandise and buying teams as well.

And that's more from an assortment perspective, giving them insights as to not only the pricing of what your competitors are selling, but the offerings, you know, what categories are they strong in, you know, how does your assortment in terms of styles and colors and sizes, you know, compare to what you know, to what they're selling? 00:16:19:14 - 00:16:34:14 Unknown And that really helps them sort of, you know, making sure that we've got, you know, the right product at the right place at the right time.

Now, I can totally relate to this. I sold for seven years myself. And looking what competitors are doing was a huge chunk of my time every day. And it was a bit of a pain in the neck.

00:16:34:14 - 00:16:51:04 Unknown But obviously you wanted to do this, so AI is definitely a friend there. Could you share some success stories or case studies of businesses that you worked with and what kind of results they saw? We work with a lot of major brands and retailers, and so one of our customers is a company called Herschel. They're in sort of the baggage and luggage space.

00:16:51:04 - 00:17:15:07 Unknown They're a direct consumer brands. So they manufacture and their own products. And you know, they've they've seen significant success with the platform really around their Amazon channel. So, you know, they have a first party relationship with Amazon.

And again, it's a constant challenge making sure that Amazon are selling their products at the right price point. And they're not discounting them below the map. 00:17:15:07 - 00:17:33:05 Unknown And the reason this happens is a lot of the time, that there will be often a sort of gray market seller, you know, someone who's perhaps not an off rise distributor but has managed to get hold of, you know, Herschel's inventory and, you know, they're selling a one. You know, they may only have a handful of stock, but they've discounted, you know, a bag by 40%.

00:17:33:07 - 00:18:01:03 Unknown Well, Amazon has very sophisticated price monitoring technology to. And so they will see that someone else in the market is selling this product. And so they'll lower their price. And then when Amazon lowers the price will everyone else follow suit.

And so you've got this very quick cascading sort of domino effect where all of a sudden, you know, in the blink of an eye, you've gone from your entire channel adhering to your map price and selling it at full price, and everyone's selling it at 40% off. 00:18:01:03 - 00:18:20:06 Unknown And so what we provide is really sort of the forensics tools to go fix this and allow us to go, you know, allow our client, in this case, Herschel, to very quickly go to their resale channel and sort of effectively sort of, you know, enforce remedial actions, but especially with Amazon.

So I think that's kind of the key thing is that sort of margin protection. 00:18:20:06 - 00:18:39:19 Unknown And it's really it's bigger than just margin protection. It's overall sort of, you know, brand perception in the market. You know, a lot of our clients are full price premium brands.

And so, you know, it's very, very disruptive to the brand to find their products discounted. And they want to act very, very quickly on that. Yeah I can see the importance of that. 00:18:39:19 - 00:19:00:13 Unknown And if you're brand selling on Amazon, I think pretty much everyone does.

It's so important to be there. Spot on with your pricing. I think you gave a great example there. So you already said some industries you're working with who's your perfect customer?

I think you're a perfect customer for us is a complex customer. It's it's a customer that, you know, sells on many channels. 00:19:00:13 - 00:19:19:09 Unknown They have their own direct consumer e-commerce website. They have physical brick and mortar.

They have if they're brand, they have a, you know, a complex distribution resale channel that may include all the the Macy's and Nordstrom's, the Amazons of the world, and then a long tail of, you know, potentially hundreds or many hundreds of kind of resale partners. 00:19:19:09 - 00:19:44:00 Unknown And they have very large catalogs. I'd say on the other side, you know, we work with sort of large furniture brands, etc., where the key thing for them is that no one sells their products, but they want to benchmark similar products that their competitors have.

So they may have a sulfur. No one else sells the identical sulfur. They're the only distributor of their sulfur that there may be, you know, 40 other competitors that sell very similar sulfur. 00:19:44:02 - 00:20:02:17 Unknown And what our AI and archeology allows us to do is really find those almost identical products.

They have the same attributes, the same fabric, the same dimension, roughly the same cost point. Those are sort of the complex use cases where where we thrive. Okay, walk me through the typical onboarding process of a new customer. What steps are involved?

00:20:02:18 - 00:20:24:06 Unknown How long does it take to get up and running? It's actually really quick because we're monitoring over 100,000 brands in e-commerce websites every day with our platform, and we've been doing that since we sort of inspected almost two years ago. We have all the data, so you can actually onboard almost immediately all of our demos. We're actually showing your your brand with your sort of live competitor data.

00:20:24:06 - 00:20:45:18 Unknown So we actually don't require any integrations. Our whole technology is sending bolts to or these agents to both our customers websites and on their competitors. We already have the data. So it's onboarding.

Is it really quick? Okay. That basically also answers my next question. If there's any kind of homework that immersion needs to do before they get started.

00:20:45:20 - 00:21:15:09 Unknown No. That's it. I mean, you know, really, really the homework is clicking the onboarding and, you know, getting into the system. We've shown all the value.

And we actually, you know, solve real use cases during our sales cycle. Because when we're demoing the product, we're demoing live data from our customers and their competitors. So we can actually sort of show the pain points and solve some of the pricing issues during the sales cycle, which is, you know, which is obviously very powerful. 00:21:15:10 - 00:21:35:22 Unknown Yeah, I like that that the AA agents takes over the work and you can start immediately.

So that's a that's a great onboarding. Now we were talking about pricing all the time. How does your pricing structure work. Yeah.

So our pricing is really a classic you know SaaS based model. We have a flat fee for what we call our marketing competitive intelligence platform. 00:21:35:22 - 00:21:52:01 Unknown And that gives you access really for sort of the marketing teams use cases of monitoring, you know, all of your competitors websites, the products that they're selling, their promotions they're running, the emails are sending, the social posts that they're doing the ads, etc.. And then we have two add on modules, one for the retailers that we call sort of price intelligence.

00:21:52:01 - 00:22:17:16 Unknown And we have one for the brands, which we call wholesale intelligence and knows a price based on basically how many, how many products and how many competitors you want to monitor. Okay. Very interesting. Before our coffee break comes to an end today, Peter, is there anything you want to share with our listeners that we haven't covered yet?

When I'm on a sales call with a prospect, we always have a little sort of, you know, a little giggle, because I always ask them, you know, who's responsible for competitive intelligence at your at your company? 00:22:17:16 - 00:22:59:15 Unknown And the answer you always it's no one's job and it's everyone's job. I side of the top five retailers even very very rarely do you find that there's a dedicated competitive intelligence team that's very rarely a head of competitive intelligence.

Usually it falls on the marketing team and really everyone from the CEO downwards. And so that's really the mission of our company is we want to sort of, you know, through our agent and our technology and our AI, we we come in as almost a sort of virtual team member who is responsible for competitive intelligence, bringing the insights, bringing the actions, and making sure that, you know, our customers effectively through using our platform, are 00:22:59:15 - 00:23:20:14 Unknown able to create an in-house competitive intelligence team at a fraction of the cost of what, and a scale of magnitude that can never be achieved with human based, human based team.

It's surprising to hear that so few companies really use the advantage of pricing, and I think pricing is one of the most complicated things in your whole business. 00:23:20:14 - 00:23:36:15 Unknown Having the right products at the right, that the right price at the right time is what it's all about. And, you know, if you screw up on, on, on any of those few factors, but especially the pricing, you know, whether it's, you know, overpricing or under pricing, you know, you're going to create major, major problems for yourself.

Yeah. 00:23:36:16 - 00:24:06:00 Unknown Cool. Peter, where can people go and find out more about Shop Vision. Come to our website.

You know, Shop Vision AI. And honestly, we really encourage you to, you know, book a demo when we give a demo. Like I said, it's not just a sort of, you know, cookie cutter demo. We create a completely personalized environment so we can show you immediately on a quick 30 minute call, you know how and show you benchmarks and competitive analysis of how your brand is holding up to your competitors.

00:24:06:00 - 00:24:20:23 Unknown And immediately, even in that first demo, show you things that you don't know it happening that are hurting, you know, hurting your margins, you know, hurting your brand. Okay, I will put a link in the show notes as always. Then you just one click away and I hope a lot of listeners will reach out to you and find out how good their pricing is. 00:24:20:23 - 00:24:25:04 Unknown Thanks so much for your time today.

Great. Thanks very much. Pleasure. Pleasure to be on the show.