As retailers, you know that offering tailored pricing is crucial for attracting and retaining customers. Customer Pricing Groups (CPG) enable you to segment your customer base and provide targeted discounts based on shopping behavior. However, the complexity of managing customer databases and an extensive product range often leads to challenges, particularly when adjusting prices in real time based on fluctuating customer demand and competitive pressures. Retailers often find it difficult to react quickly to market changes, especially when dealing with a high volume of transactions.
Oracle Global Services Center and Oracle Consulting have developed a dynamic pricing solution leveraging Oracle Fusion Pricing Engine to determine the intermediate-level pricing based on the minimum and maximum discount set at the customer grouping levels. The Pricing engine also factors in all the discounts across different price lists to calculate the ‘Best Price’ for a sales transaction, considering the combination of Customer Pricing and Product Group.
Oracle Fusion Dynamic Pricing solution simplifies the process, helping you to efficiently manage your Customer Pricing Groups and deliver the right price at the right time to your customers. The solution was implemented for one of the largest producers and retailers of quality building and home improvement products in Australia.
Solution Overview:
The solution uses the Oracle Fusion Pricing algorithms to dynamically determine the intermediate discounts for each Customer Price Group level using predefined formulas, and also derive the best discount that can be provided to a customer based on the combination of Customer Pricing Group and Product Group.
► Integrate with POS Systems: Seamlessly integrate the Fusion Pricing engine with your point-of-sale (POS) system and other sales applications using the out of box pricing REST API (“/fscmRestApi/priceExecution/documentPrices/priceSalesTransaction”). This ensures smooth real-time pricing updates at the point of sale and other sales transaction terminals.
► Monitor and Adjust: Continuously monitor the effectiveness of pricing strategies and make necessary adjustments. Retailers can leverage the following tools available as part of Fusion pricing to fine-tune pricing and discount details, based on their transaction volumes:
- ADFDI (Application Desktop Integration): This tool extends Oracle’s Application Development Framework into desktop applications like Microsoft Excel for easy data management.
- FBDI (File-Based Data Import): A method for importing and updating large volumes of data into Oracle Financials Cloud, ensuring that pricing data is kept up to date.
- VBCS Excel Plugin: The Oracle Visual Builder Add-in for Excel allows users to edit business data directly from REST services, making price management more efficient.
The Pricing Algorithm: determines the “Best Price” by retrieving the following discount details, dynamically comparing discount percentages, and applying the highest discount to the sales transaction.
► Customer Specific Prices: Tailored for individual customers, customer groups, or specific items, differing from standard discounts.
- Trade Customer Group Prices: Prices are based on the customer’s classification level, with lower-level trade customers paying higher prices and higher-level customers receiving lower prices.
- Item Clearance Prices: Special prices offered to all customers who walk into the store during specific events or time periods.
- Promotional prices: Time-limited catalogue prices available at select locations for all customer groups.
- Retail Customer Group Prices: Prices for non-trade groups, based on the combination of retail group and product group.
- Shelf Prices: The displayed price a customer sees on the shelf, originating from traditional brick-and-mortar stores.
Benefits for Retailers and Customers:
- Seamless Integration: The solution integrates effortlessly with point of sale (POS) and other upstream (or) downstream sales applications, ensuring consistency in pricing across the entire ecosystem.
- Easier Price Management: Retailers benefit from Oracle Fusion Pricing tools that streamline the maintenance of price and discount lists, making pricing operations more efficient.
- Reduced Maintenance: The need to create and maintain multiple price and discount lists is minimized, simplifying the process of price management.
- Dynamic Pricing Calculation: Prices can be calculated dynamically at various levels of the Customer Pricing Group hierarchy, ensuring that customers receive the most accurate pricing based on their segment.
- Scalability: The solution increases the scalability of the pricing model as it can be easily rolled out to multiple entities, while allowing for the addition of new customer pricing groups and products.
- Improved Accuracy: The dynamic pricing system ensures more accurate pricing for sales transactions across all integrated systems, enhancing pricing consistency throughout the organization.
Additional Information
In summary, Customer Pricing Groups offer a powerful strategy for retailers to deliver personalized pricing, drive revenue, and improve customer relationships. By leveraging dynamic pricing solutions, along with Oracle Fusion Pricing, retailers can overcome the complexities of managing large-scale pricing structures and fluctuations in demand. With the right tools and strategies in place, retailers can enhance their competitiveness, optimize inventory management, and ensure that pricing remains accurate, efficient, and responsive to market needs.
For more details regarding this unique solution, please contact:
• Aravinth Perumalsamy, Enterprise Architect (aravinth.perumalsamy@oracle.com)
• Maurice Zalloua, Consulting SCM Solution Manager (maurice.zalloua@oracle.com)