Since the 1990s, retailers across industries have preferred SAP's comprehensive solutions for inventory and pricing management. However, at some point, SAP-based retailers eager to gain more advanced pricing capabilities and easier user experiences may face the limitations of their in-house solutions. Moreover, integrating SAP environments with advanced AI pricing platforms can also become a challenge.
On October 29, speakers from SAP, Competera, and Syntax came together to showcase the proven solution to help retailers tackle these challenges. The experts discussed how the new connector developed by Syntax and Competera allows seamless integration between SAP environments and Competera's AI pricing platform, enabling smarter pricing, faster implementation, and more effective management within the SAP environment.
Let's recap the key insights and messages of the webinar.
Challenges Pressuring Retailers to Seek a More Advanced Pricing Solution
SAP Lifecycle Pricing Capabilities cover various retailers' needs and use cases. At some point, however, when tackling multiple challenges, you might need a more sophisticated solution, like Competera's AI pricing platform, that will cover more specific pricing use cases.
Below are a few of the major challenges that require retail businesses to seek advanced pricing solutions:
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Inflationary Pressures: rising costs of goods and services impacting profit margins.
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Changing Consumer Behavior: shifting preferences and purchasing habits requiring agile pricing strategies.
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Supply Chain Disruptions: uncertainty and volatility in supply chains affecting pricing stability.
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Sophisticated Data Management: collecting and analyzing large amounts of data for informed pricing decisions.
AI-driven price optimization implies recommending optimal price points based on 20+ pricing and non-pricing factors and dynamically adjusting prices in response to demand fluctuations. The latter is just one of the pricing use cases that traditional pricing solutions within SAP environments do not cover. The visual below can give you a broader picture of specific pricing use cases that require integrating an advanced solution.
Key features and benefits of the joint solution by Competera and Syntax
Once you've realized the need for a more complex pricing solution, you must choose the best option that fits your needs. One of the major criteria in this regard is the integration capabilities offered by a vendor. And that's where the joint solution developed by Competera and Syntax comes into play.
The Competera and Syntax partnership enabled seamless integration of the Competera Pricing Platform into the SAP environment. Here is how it works: Competera's pricing data is consumed via the Pricing Technique in S/4, ensuring a smooth data exchange. Once accurate and dynamic pricing information is in place, retailers' pricing strategies are ready for optimization, generating enhanced business outcomes.
The joint solution offers an optimized and scalable pricing design to support customer-centricity and omnichannel experience. With smart AI price adjustments, you can sustainably increase revenue and margins. Last but not least, you will enjoy more effective category management reinforced by predictive pricing. Here is what you get with a solution by Competera and Syntax in terms of functionality:
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Predictive retail price simulations based on customizable pricing tactics, predefined rules, competitive data, rounding, price families, expected margin, and other parameters.
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Advanced user access management capabilities to improve control over particular price bands and categories.
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Interactive user interface that meets business maturity level and scalability needs.
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Enhanced reporting to effectively track the pricing performance.
Takeaways and insights from the webinar speakers
Kara Reed, Solution Manager at SAP, emphasized SAP's holistic approach to integrating pricing, merchandising, and supply chain into a seamless system that unites planning with execution. By centralizing these processes, SAP enables retailers to plan and execute pricing strategies and inventory management within a unified data model, improving decision-making at every stage.
Kara Reed also highlighted the synergy between SAP's foundational data and analytics with Competera's advanced algorithms and Syntax's industry expertise, creating a powerful lifecycle pricing solution that equips retailers to make data-driven, optimized pricing decisions throughout the product lifecycle.
Eugene Van Zyl, Senior Solution Director and SAP Solution Architect at Syntax; as well as Francois Potier, Partner at Beyond Technologies, Syntax company, emphasized the necessity of agile pricing strategies to meet the challenges faced by SMBs and large retailers. They noted that SMBs grapple with limited resources, price-sensitive customers, and fierce online competition, complicating effective market research and brand-building efforts. In contrast, large retailers face intense price wars, margin management issues, and the complexities of omnichannel and dynamic pricing.
Francois Potier asserted that SAP's robust foundation, when paired with top partners, like Competera, fills these gaps, providing a comprehensive platform that helps retailers of all sizes address pricing challenges with agility and precision.
Alex Galkin, CEO and Co-Founder of Competera, highlighted that many retailers initially focus on sales channels but often need to pay more attention to the nuanced pricing needs across different clusters of SKUs or store locations, which require distinct pricing strategies. He explained that Competera's contextual machine learning offers a transformative approach by analyzing daily POS data and factoring in dozens of pricing and non-pricing factors to determine the unique price sensitivity of each cluster. Beyond traditional pricing models, this context-driven, elasticity-based approach enables retailers to set prices with unmatched precision, provided they have a strong data foundation and the right technology partners.
Who benefits the most from the solution?
The ideal candidates for adopting the joint solution are retail businesses that already use rule-based pricing with some level of analytics, factoring in customer and economic variables. Typically, these retailers have centralized pricing teams that set prices based on a few core metrics—like elasticity, margin, and rounding—and rely on the SAP ecosystem for pricing and inventory management.
For these businesses, the next evolution in pricing involves integrating AI-powered solutions like the one by Competera and Syntax. The latter brings advanced AI models capable of eliminating internal KPI conflicts and enhancing pricing efficiency, leveraging over 20 pricing and non-pricing factors beyond basic elasticity. Ideally, retailers should have two years of historical sales data to get the maximum out of the solution. However, using simplified rules, integration can begin with as little as six months of data available.
What about real-life numbers and cases? Here is an excellent recent example: Competera helped an Eastern European grocery retailer tackle cross-elasticity challenges, driving a 6.7% profit increase in just eight weeks. The retailer also saw an 8.4% rise in items sold and a 3.6% boost in order value, underscoring the impact of a data-driven, AI-powered pricing approach.
Impressive, right? If you want to explore how the solution can drive similar results for your business, contact Competera and Syntax today for an individual consultation.
