Alex Shartsis, Co-founder & CEO at Perfect Price, sits down with Jeff Frick for a CUBE Conversation.
Dynamic pricing: Complex businesses turn to AI for the perfect price
https://siliconangle.com/2018/01/22/dynamic-pricing-complex-businesses-turn-ai-perfect-price-thecube-cubeconversation/
Dynamic pricing, the sale of goods or services based on multiple factors, including real-time customer demand, is becoming more widely used across a range of large industries. What’s driving adoption is both the complexity of many businesses (try booking an airline ticket or renting a car these days) and the advancement of artificial intelligence, which can now incorporate many variables seamlessly compared to humans.
“If you think about dynamic pricing for businesses that are very large, like rental car companies, hotels, airlines, transportation trucking, where you’re dealing with thousands of factors, why would you trust that to people if you don’t have to?” asked Alex Shartsis (pictured), co-founder and chief executive officer at Perfect Price Inc. “They see that using AI for dynamic pricing is the next evolution, and they don’t want to get left behind.”
Shartsis visited theCUBE, SiliconANGLE Media’s mobile livestreaming studio, and spoke with host Jeff Frick (@JeffFrick) at SiliconANGLE’s studio in Palo Alto, California. They discussed markets where Perfect Price has found interest in its technology and other industries that could benefit from dynamic pricing.
Sill a preference for ‘bad’ pricing
When Perfect Price was started in 2013, the founders went into the dynamic pricing business believing that many traditional companies that calculated price based on an age-old formula involving cost of acquisition and a static profit margin would be open-minded about changing the model. That’s not exactly how things turned out.
“We went into this thinking there were a lot of businesses stuck in ‘cost plus pricing’ and they would benefit the most from using AI to price things because they are doing such a bad job of it today,” Shartsis recalled. “But it turns out they like doing a bad job of it, for whatever reason.”
The company has found traction for its technology in verticals such as the consumer transportation industry. Perfect Price recently announced a partnership with Rate-Highway, Inc., a rate-positioning technology provider for rental car companies, to leverage AI for price optimization and improved revenue management.
“The more accurately you fit your pricing to demand, the more money you’ll make, the better run your business will be, the more time you’ll save,” Shartsis said. “It has a lot of implications.”
In evaluating the greenfield opportunities for dynamic pricing and AI, Shartsis pointed to the transportation trucking industry and event ticketing as prime candidates. There’s plenty to be done in trucking because “there are lots of permutations there,” according to Shartsis.
Although some major league teams, such as the San Francisco Giants and the Oakland A’s, have employed dynamic pricing for ticket sales during the season, there are still many events where the model has yet to be adopted.
“A lot of ink has been spilled over price gouging and scalpers,” Shartsis said. “If that industry took a hard look at pricing their products more effectively, everybody would be better off.”
Watch the complete video interview below, and be sure to check out more of SiliconANGLE’s and theCUBE’s CubeConversations
@SiliconANGLE theCUBE @theCUBE #theCUBE
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Alex Shartsis, Perfect Price | CUBE Conversation Jan 2018
Alex Shartsis, Co-founder & CEO at Perfect Price, sits down with Jeff Frick for a CUBE Conversation.
Dynamic pricing: Complex businesses turn to AI for the perfect price
https://siliconangle.com/2018/01/22/dynamic-pricing-complex-businesses-turn-ai-perfect-price-thecube-cubeconversation/
Dynamic pricing, the sale of goods or services based on multiple factors, including real-time customer demand, is becoming more widely used across a range of large industries. What’s driving adoption is both the complexity of many businesses (try booking an airline ticket or renting a car these days) and the advancement of artificial intelligence, which can now incorporate many variables seamlessly compared to humans.
“If you think about dynamic pricing for businesses that are very large, like rental car companies, hotels, airlines, transportation trucking, where you’re dealing with thousands of factors, why would you trust that to people if you don’t have to?” asked Alex Shartsis (pictured), co-founder and chief executive officer at Perfect Price Inc. “They see that using AI for dynamic pricing is the next evolution, and they don’t want to get left behind.”
Shartsis visited theCUBE, SiliconANGLE Media’s mobile livestreaming studio, and spoke with host Jeff Frick (@JeffFrick) at SiliconANGLE’s studio in Palo Alto, California. They discussed markets where Perfect Price has found interest in its technology and other industries that could benefit from dynamic pricing.
Sill a preference for ‘bad’ pricing
When Perfect Price was started in 2013, the founders went into the dynamic pricing business believing that many traditional companies that calculated price based on an age-old formula involving cost of acquisition and a static profit margin would be open-minded about changing the model. That’s not exactly how things turned out.
“We went into this thinking there were a lot of businesses stuck in ‘cost plus pricing’ and they would benefit the most from using AI to price things because they are doing such a bad job of it today,” Shartsis recalled. “But it turns out they like doing a bad job of it, for whatever reason.”
The company has found traction for its technology in verticals such as the consumer transportation industry. Perfect Price recently announced a partnership with Rate-Highway, Inc., a rate-positioning technology provider for rental car companies, to leverage AI for price optimization and improved revenue management.
“The more accurately you fit your pricing to demand, the more money you’ll make, the better run your business will be, the more time you’ll save,” Shartsis said. “It has a lot of implications.”
In evaluating the greenfield opportunities for dynamic pricing and AI, Shartsis pointed to the transportation trucking industry and event ticketing as prime candidates. There’s plenty to be done in trucking because “there are lots of permutations there,” according to Shartsis.
Although some major league teams, such as the San Francisco Giants and the Oakland A’s, have employed dynamic pricing for ticket sales during the season, there are still many events where the model has yet to be adopted.
“A lot of ink has been spilled over price gouging and scalpers,” Shartsis said. “If that industry took a hard look at pricing their products more effectively, everybody would be better off.”
Watch the complete video interview below, and be sure to check out more of SiliconANGLE’s and theCUBE’s CubeConversations
@SiliconANGLE theCUBE @theCUBE #theCUBE
