Online Pricing Algorithms

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A top concern among retail suppliers is how to avoid the so-called race to the bottom with prices resulting from online retailer Amazon’s use of algorithmic pricing to undercut its competitors.

The online price wars have been intensifying among retailers over the past 12-18 months. Keith Anderson, senior vice president of strategy and insights for Profitero, recently held a webinar on the topic, sharing with suppliers insights and strategies to mitigate downward pricing pressures. Anderson said the high-stakes race to the bottom may be good for shoppers but leaves consumer packaged goods brands scrambling.

Anderson examined online pricing across 53,000 products in beauty, grocery and household supplier on Amazon, Walmart.com, Target.com and Jet.com during 2017. He said the pricing study compared apples to apples and did not factor in loyalty programs like Target Redcard or basket discounts at Jet.com. The study focused on the online prices of the same items sold at the four retailers in 2017 between June and August and September and November.   MORE

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