Luca

Yesterday, the FTC kicked off an investigation into "surveillance pricing", or the practice of using consumers' personal data to make pricing decisions. In this investigation, they've named some of our competitors for their personalized pricing practices. I've heard from some current and potential customers that this makes them nervous. We will see how this investigation plays out in the following months but the first comments I've been sharing with them are -- 1️⃣ Customer-personalized pricing (using browser history, socioeconomic data etc) is not the same as Elasticity-aware pricing. In the former, a specific person gets targeted with a price based on their willingness to pay. In the latter, the market decides willingness-to-pay based on cumulative public behaviors. 2️⃣ Elasticities are one variable in AI-powered pricing. Equally important are other discrete variables such as cost, inventory, competitor prices and margin goals. Pricing decisions are a holistic output of parameters within and outside of your business. 3️⃣ AI-powered pricing can actually be beneficial for consumers. We have found that pricing intelligence decreases prices as much as it increases them, biasing towards decreasing prices on essentials to create volume. I look forward to the awareness and public conversation about AI-powered pricing as a result of this investigation. https://lnkd.in/gzGGTRHr

Coming out of the pandemic, Kabeer Chopra from Burrow knew that he wanted to focus on the operational efficiency of the business. The demand in the home furnishing industry had shifted over the last couple of years and pricing became a top lever for him to get to his efficiency goals. We’re excited to share our new case study with the team at Burrow. Using Luca, Burrow has been able to keep their pricing cadence and thoughtfulness, but now with a powerful pricing co-pilot enabling each decision. Here is what we’ve learned about pricing from working with this team of seasoned DTC operators – 1. Measure substitution effects – What happens when a price increase on Product A moves demand to Product B, C and D? For complex businesses like Burrow with multiple collections, we had to uplevel our cross-price elasticity game. 2. Pricing-analyst as a Service – For Kabeer, an automated pricing engine on a weekly/monthly schedule was not the right format for his DTC business. We learned that Luca had to be an at-will pricing co-pilot for this team during the times / places they did need to make price changes 3. Product relationships – For a furniture business, there are inherent pricing relationships between the small, medium and large sizes of a product. From working with Kabeer, we learned the importance of building pricing relationships into our models to respect colors, fabrics and sizes. Thank you to Kabeer Chopra and Stephen Kuhl for their partnership.  https://lnkd.in/gjtAPG5f

Help us welcome new member Luca, an AI-powered dynamic pricing and promotional engine for grocers, built by the ex-Uber pricing team. Welcome to PFMA! Learn more about Luca ➡️ https://www.askluca.com #associationnews #newmember #PAFoodMerchants #AI #ArtificialIntelligence

It's Week 1 of 2024, and I've had 6 operators from mid-size enterprise retailer leaders book calls and do RFIs (Requests for Info) 😲 "Weird", I said on one of the calls, "we're barely days into the year and you're thinking about making large tech investments already? I would have imagined your team needs a break after the craziness of Q4 for retailers" She smiles knowingly - "I'm already behind. If I spend Q1 resting on my laurels, I've missed the opportunity to fix everything that needs to be fixed for Q4 2024" Ok wow. So we dug in -- how was she actually spending her Q1? Here is what I learned. 1️⃣ Hiring Plans: Where were there operational gaps in Q4, and how is she going to allocate time to fill them? It takes 60 days to make a truly great hire, and she has charted that out for her team. 2️⃣ Supplier Conversations: This is an opportunity to focus on the cost side of the P&L. She is looking at supplier alternatives, or going back to the negotiating table on contracts with existing suppliers. 3️⃣ Tech and Process Investments: This is the time for ERP integrations, or bringing on a great marketing, pricing, or analytics vendor. It takes 2 to 4 months to fully onboard a tech provider, and Q1 is the best time to take your time to explore your options, pick a vendor, and integrate. Q1 is an opportunity. Retailers are certainly using it wisely!