Multi-SKU Pricing Vector Optimization for E-Commerce Conversion
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Solution Overview
Problem
Dynamic pricing methods in e-commerce often result in low traffic conversion rates due to not considering the impact on related commodities, leading to suboptimal sales and profit performance.
Innovation Solution
A pricing method that determines a price vector under test and a reference conversion rate score, adjusts prices based on comparison results, and updates current prices to improve traffic conversion rates by considering multiple SKUs as a whole, using a computer-implemented process to automatically adjust prices without manual intervention.
Engineering Contradictions & Design Principles
Engineering Contradiction Analysis
1Adaptability or versatility
If manual price setting by Procurement & Sales personnel is used, then pricing flexibility and business judgment are improved, but labor costs and time consumption increase
Solution Approach 1:
The system enables self-service pricing by automatically determining optimal prices for multiple SKUs based on conversion rate scores, eliminating the need for manual price setting by procurement and sales personnel while maintaining pricing flexibility through algorithmic optimization
Solution Approach 2:
The patent replaces the mechanical manual pricing process with an automated computational system that calculates price vectors and conversion rate scores, substituting human judgment with algorithmic decision-making to reduce time consumption while maintaining adaptability
2Productivity
If single SKU dynamic pricing is used, then individual product optimization is improved, but overall traffic conversion rate remains low
Solution Approach 1:
The patent merges multiple individual SKU pricing decisions into a unified price vector optimization approach, where prices of multiple SKUs are adjusted together based on their interrelationships and combined impact on traffic conversion rate, achieving both individual product optimization and overall conversion rate improvement
Solution Approach 2:
The patent transitions from one-dimensional single SKU pricing to multi-dimensional vector pricing, considering multiple SKUs simultaneously and their interactions, thereby expanding the pricing decision space to achieve better overall traffic conversion rates
3Quantity of substance
If hierarchical commodity management with multiple personnel is used, then comprehensive product coverage is improved, but system complexity and coordination overhead increase
Solution Approach 1:
The patent creates a universal pricing system that handles multiple SKUs across different categories through a single automated framework, eliminating the need for separate hierarchical management structures and multiple personnel while maintaining comprehensive product coverage
Data Source
AI summary
The present invention relates to the technical field of electronic commerce, and provided thereby are a pricing method performed by a computer and device, and a non-transient computer-readable storage medium. The pricing method includes: determining a price vector to be tested and a reference conversion rate score according to a set of price vectors and a conversion rate score corresponding to each price vector, wherein each price vector in the set of price vectors comprises the price of one or more inventory units in the same period; selecting an optimization direction according to a result of comparison between the conversion rate score corresponding to the price vector to be tested and the reference conversion rate score, and determining an optimized price vector on the basis of the optimization direction; and updating the current price of the inventory unit using the price in the optimized price vector.