Price personalization has been touted as the holy grail of e-commerce. This conversation brings to light the state of the union in the domain of price optimization, price intelligence, and price personalization.
Sramana Mitra: Let’s start by setting some context for our audience of what Profitero does and what your background is.
Keith Anderson: Profitero was founded in 2010 in Dublin, Ireland by former IBM and Google software engineers. Sometimes people ask why the company was founded in Ireland and not in Silicon Valley. Dublin has established itself as a European technology hub. Our founders live there. We’re backed by Polaris Partners, which has offices both in Boston as well as in Dublin where we’re headquartered. We now have offices in Dublin, London, Boston, San Diego, Belarus, and Minsk. We’ll shortly open offices in Asia and other parts of Latin America this year.
The company was founded originally as a competitive online price intelligence for retailers—both online and brick-and-mortar. If you go back to 2010 when we were founded, you may be aware that one of the key inputs to Amazon in their dynamic pricing engine is their competitor’s online prices. That’s not proprietary knowledge. That has been in the public domain for many years now. The company was started to help put other retailers on more equal footing because as e-commerce has become widely adopted, the prices of products in essentially every category are transparent not only to consumers but also to other retailers. We developed the capability to monitor that highly structured data accurately on a daily basis or more frequently and then give data to our customers who can use to manage their price competitiveness in the market whether it was in their online or brick-and-mortar business.
The core capability that we needed to develop was really about scalability because our customers have tended to be the Tier 1 retailers and now, Tier 1 manufacturers. They are the largest enterprise customers with the most demanding requirements for accuracy and scalability. The technology component was really critical to the business. With time, our founders, investors, and the board saw that there were some other equally or maybe more valuable applications in related industries. The core of the technology is the ability to monitor anything in a structured or a semi-structured format on any retailer’s website. We’ve already demonstrated the immense value in pricing.
I believe strongly that there are a lot of manufacturers for whom e-commerce is also the fastest-growing channel of distribution. They would value much better visibility in the way their brands are present online. We’ve adapted the core capability to serve leading manufacturers like SC Johnson and L’Oréal. We’re working with a dozen other global manufacturers, not only CPG manufacturers, but also electronics companies to help them understand how to improve their performance through online retailers.