Pricing optimization software: questions
The questions we are asked most often about pricing optimization software, answered without the marketing layer.
What does pricing intelligence decide?
When to change a price, by how much, and for which products — accounting for elasticity, competitor movement, inventory position and margin floor. The last two are what separate it from a repricing tool: a discount that clears stock you needed is not a good decision even when the price is right.
Does it just follow competitors?
No, and a system that does is a race to a margin nobody chose. Competitor price is one input among several. A competitor clearing end-of-season stock is not a signal to match; understanding why they moved is what makes the input useful.
How does it handle products with little sales history?
By borrowing from similar products rather than guessing. A new SKU in an established category inherits the elasticity of its neighbours until it has generated enough of its own signal, and the record says which products it borrowed from so a category manager can disagree.
Can we keep prices under human approval?
Yes, and most organisations should at first. Pricing is highly visible and hard to reverse in customer perception even when it is trivial to reverse in the system. Approval thresholds by magnitude — automatic under two percent, reviewed above it — are the usual middle ground.
Related: Demand Intelligence · Inventory Intelligence