A pricing strategy that maximizes profitability without compromising conversion has been a long-standing challenge for retailers—one that is both more important and more complex to execute because of recent macroeconomic and competitive forces. Capturing wallet share is critical for retailers as consumer spending decreases while the cost of goods and shipping increase.
Other pricing strategy methods are antiquated and do not solve for modern retail. Examples of potential deficiencies include:
- Inability to comply with evolving data privacy regulations
- Logins and obsolete pricing making competitive pricing data less relevant as a model input
- High-cost testing methods that do not dynamically account for less effective scenarios and continue to negatively impact profitability
It seems bleak, but there is a silver lining. As retailers turn to their tech stack for innovation and inspiration on how to future-proof their businesses, solutions that are proven to work today and positioned to solve tomorrow’s challenges provide comfort by empowering a shift in strategy from reactive to proactive.
Bringing the power of the Data Cloud to pricing optimization
Spresso is one such solution. Spresso is a modular SaaS platform built by retail technology experts with years of operational experience in response to real-world challenges around pricing, data privacy, and maximizing customer LTV. Spresso solutions leverage machine learning, advanced analytics, and AI to deliver data-driven insights and automated prescriptive analytics that empower retailers to take meaningful action. With Spresso Price Optimization modules, retailers can test, qualify, and launch new pricing strategies in real time with full awareness of consumer behavior, conversion, and profitability.
Supporting dynamic price optimization for thousands of SKUs hinges on the ability to compute billions of impressions in real time. Snowflake makes this possible for Spresso. The power and performance of Snowflake gives Spresso an edge when it comes to delivering effective solutions to retail customers.
Spresso’s Snowflake journey: From data stack to trusted partner
Snowflake’s elastic compute and auto-scaling capabilities allow Spresso to optimize thousands of SKUs and process billions of impressions in real time, a requirement for the multi-armed bandit pricing algorithm that is the foundation of Spresso’s price optimization solution.
As Spresso VP of Data Analytics James Dorado explains, “When we migrated to Snowflake, we saw performance improvements of up to 80%, which saved Spresso money and allowed us to make our pricing optimization engine even faster.”
Spresso’s Snowflake journey began in 2019, when Spresso tech and data leadership explored new technology partners to build a world-class modern data stack. During this process, Snowflake emerged as the clear front runner when it came to the Data Cloud, with data warehouse workloads winning every head-to-head speed test.
In addition to powerful performance, Snowflake integrates natively into the Spresso data stack, including dbt for data modeling, Airflow for orchestration, and Fivetran for third-party ELT. Beyond the integrations, Snowflake has tight-knit partnerships with these organizations and drives continuous innovation that Spresso both contributes to and benefits from.
Then, when Spresso sought to expand its insights to other retailers, Snowflake stepped up to support the strategic build of a multi-tenant modular SaaS data platform. This architecture had two notable benefits for Spresso and joint Spresso and Snowflake customers:
- For Spresso, the multi-tenant architecture enabled the business to “build it once” and scale to an infinite number of modular SaaS customers, creating enormous operating leverage.
- For joint Spresso and Snowflake customers, the structure means data can be shared directly and securely to Spresso with no additional ETL process or integration. This supports a smooth implementation, near-instant access to data, and faster realization of ROI.
While Spresso’s data team was initially drawn to Snowflake because of its power and speed, over time Snowflake emerged as a true partner for Spresso, integral in the design of Spresso’s multi-tenant instance. It was clear Snowflake cared about the joint success of the partnership; as part of the Powered by Snowflake program, Spresso could reap the benefit of Snowflake’s technology as well as get support to drive go-to-market.
“We enjoy the partnership with the Spresso team on their mission to solve core challenges at retail. Spresso is a technology company paired with deep retail and ecommerce expertise that only comes from being an operator themselves. We look forward to supporting Spresso both in product commercialization strategy and bringing awareness to their critical solutions for modern retail,” said Prabhath Nanisetty, Industry Principal for Retail Data & Technology at Snowflake.