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Internet Retailing: How price optimisation drives profits for retailers

March 11, 2014
Written By

The latest issue of Internet Retailing magazine looks at how price optimisation has become mainstream for markets outside the UK, significantly helping to grow profits for retailers in America and mainland Europe. The article features commentary from Profitero and suggests that now is the time for UK multichannel retailers to catch up.

A decade ago, price optimisation was expected to transform UK retail operations and improve profitability. North American retailers and many in mainland Europe, most notably in France, are already mature adopters of price optimisation but in the UK, this has not been the case.

US price optimisation firm Revionics reveals that optimisation can deliver significant improvements: Family Dollar, a value grocery chain with an average basket size of just $10, reported gross margin improvements in optimised product categories of 4%, with increases of around 5% in gross margin.

“In North America, you’d be a very unusual retailer if you didn’t have a price optimisation solution”, says Mike Taylor, DemandTec strategy lead at IBM, “whereas in the UK pricing is set by competitiveness.”

Internet Retailer reports that monitoring the prices of competitors has never been easier, with companies such as Profitero delivering daily reports on web prices to dozens of retailers. In the run-up to Christmas, some Profitero customers wanted four daily updates whilst a French customer monitors nine retail chains across 600 locations: some 12 million price points daily.

“All UK supermarkets use online pricing data and the US is catching up”, comments Profitero CEO and co-founder Vol Pigrukh.

Price optimisation is generally regarded as being most effective for fast-moving, replenishable merchandise, typically groceries, DIY and consumer goods. However there are also cross-channel implications that can affect whether online and in-store prices should be the same – retailers can tweak prices in different channels to influence where customers shop.

With pricing set to take centre stage for any multichannel retailer who wants to be profitable, Howard Langer, Global Capability MD for Pricing and Promotions at Dunnhumby, sums it up by stating: “Pricing is the biggest lever any retailer has and it is at the heart of what they do; it is important to recognise pricing as a management discipline”.

Discover how Profitero delivers accurate and reliable competitor price intelligence to help retailers compete more effectively on price. Watch our on-demand webinar with price optimisation provider Revionics to find out how you can compete more profitably with strategic pricing. Competitor price monitoring for retailers and brands

About Profitero

Profitero is the leading global provider of online competitor pricing data. We provide both bricks & mortar and online retailers with their competitors’ prices, promotions and full product assortment information. Profitero’s accurate and timely competitor intelligence enables our customers to make better informed and more profitable pricing decisions, helping them to increase sales as well as margins.

More than 40 global retailers, including Staples, Sam’s Club, Tesco, Waitrose and Ocado, rely on Profitero Price Intelligence to:

  • Benchmark competitor prices
  • Manage their prices and promotions
  • Attract price sensitive shoppers
  • Negotiate better with suppliers.

Our pricing data can be seamlessly integrated into price optimization solutions such as Blue Yonder, Revionics and IBM DemandTec, to deliver more accurate and effective price optimization. Profitero is also the preferred supplier of online competitor pricing data to Nielsen’s retail customers across more than 100 countries.

To discover how Profitero can help make your pricing smarter, contact us at or visit

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