Thursday, April 24, 2014

Predictive Analytics for the Smart Consumer?

#CW500 If merchants can use predictive analytics to get more out of the customer, why can't the customer use predictive analytics to get more out of the merchant?

In December 2012, I reported on a subscription-based service from decide.com, which predicted future retail price changes (based on retailers' past behaviour) and encouraged its members to use these predictions to optimize the timing of key purchases.

Many retailers have fairly regular patterns of seasonal price changes and promotions, which are designed to maximize the lifetime profitability of a product. This is particularly important for fashion goods and high-tech, which tend to have a high initial price and a low clearance price. However, if customers (with the help of advisory services such as decide.com) start to game these price changes, then profit optimization becomes a lot harder to calculate. So this kind of advisory service represents a significant threat to retail profitability.

In September 2013, decide.com was acquired by eBay and effectively closed down. “This is an exciting opportunity to bring Decide’s expertise in data and predictive analytics to the worldwide commerce leader and empower over 25 million eBay sellers,” said Mike Fridgen, CEO of Decide.com. “We believe teaming up with eBay allows us to realize our mission of leveling the playing field in commerce.” (eBay 6 September 2013, Geekwire 6 September 2013)

In other words, taking the advantage away from the customers and giving it back to the sellers.

However, other customer-side predictive services may be still available, including GasPredictor.com (for Gasoline) and Kayak (for air travel).


Predictive Showrooming Dec 2012

Tricia Duryee, Decide.com Says It Will Accurately Predict Prices or Your Money Back (All Things D, 19 April 2012)

Thorin Klosowski, Kayak Adds Price Forecasting to Predict Price Drops and Increases (Lifehacker, 15 Jan 2013)

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