Smart Pricing Technology is a website that helps retailers optimize tactical pricing. The service implements the technology, which by mathematical analysis finds the optimal price for the entire product range, in which marginality and volume of sales will be balanced.

‍

Onset

Our goal was to develop a website to which users can upload files containing the necessary data for machine learning algorithms and obtain the results of calculations.

The price optimization process is based on working with Big Data. Thus, analyzing the history of business sales and market prices of nearest competitors, the system forecasts sales volumes of each product at different price levels and finds the most advantageous price for each product on the basis of the data obtained .

‍

Implementation Features

The most interesting challenge we faced in development was the problem of identifying the relationships between all pairs of interchangeable and complementary products. For example, we calculated the measure of commodity additionality on the basis of information on the available fiscal documents, but to train the algorithm we needed to define it. Eventually this problem was solved by our Data Scientist.

‍

Machine Learning

During the development we had to decide on the technologies of machine learning to use. One of the methods we have chosen was multi-factor regression analysis, which allows us to determine the degree of interaction between variables, for example, between complementary and interchangeable products. We also used data clustering and CNN (Convolutional Neural Network).

‍

Technology Stack

Before proceeding directly to the development of the website we have decided on the technological stack of the project. We chose Python as the most popular tool for Data Science today which has a vast selection of libraries of machine learning algorithms. So we applied scikit-learn, sklearn, NumPy and its extension - SciPy. The server part of the site was developed on the backend framework Django, the frontend part was implemented on the framework React.js.

‍

Results

As a result we have developed a website with comprehensive functionality to determine the optimal retail price, which increases gross profit. Our service is already popular among thousands of retailers and contributes to the development of their business.

‍