Substitutable Item Cohorts for Cross-Platform Price Competitiveness
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Solution Overview
Problem
Existing solutions fail to effectively measure price competitiveness at a group level for substitutable items across digital platforms, ignoring the importance of selection and pricing of similar or substitutable products, which is crucial in the hyper-competitive retail landscape.
Innovation Solution
A cohort-based approach is introduced to determine a competitiveness value for sets of substitutable items by defining cohorts based on category, item type, brand, attributes, and price buckets, using normalized demand values and demand-weighted average selling prices to identify the best value digital platforms.
Engineering Contradictions & Design Principles
Engineering Contradiction Analysis
1Measurement precision
If individual product pricing is tracked and compared across digital platforms, then price tracking accuracy is improved, but the ability to measure competitiveness at a group level deteriorates
Solution Approach 1:
The patent segments the analysis into two levels: individual product price tracking (maintaining precision) and cohort-based group analysis (enabling versatility). By dividing substitutable items into cohorts based on category, item type, brand, attributes, and price buckets, the system simultaneously achieves accurate individual tracking and meaningful group-level competitiveness measurement.
Solution Approach 2:
The patent introduces a new dimension of analysis by moving from single-product comparison to cohort-based group comparison. This dimensional shift allows the system to measure competitiveness at both individual and group levels, resolving the contradiction between tracking precision and group-level adaptability.
2Measurement precision
If prices of exactly similar products are compared across digital platforms, then price comparison accuracy is improved, but the relevance to substitutable products deteriorates
Solution Approach 1:
The patent applies local quality by creating specific cohorts for different types of substitutable items based on their characteristics (category, item type, brand, attributes). Each cohort is analyzed with appropriate metrics tailored to its specific nature, allowing accurate price comparison within cohorts while maintaining versatility across different product types.
Solution Approach 2:
The patent changes the comparison parameters from exact product matching to cohort-based grouping. By defining cohorts using multiple parameters (category, item type, brand, attributes, price buckets), the system maintains measurement precision for comparable items while expanding adaptability to analyze substitutable products that are not exactly identical.
3Ease of operation
If best value is offered on every product individually, then customer satisfaction is improved, but sustainability deteriorates
Solution Approach 1:
The patent applies partial action by focusing competitiveness efforts on cohorts where the digital platform has competitive advantage rather than attempting to offer best value on every single product. This selective approach maintains customer satisfaction in key areas while preserving pricing sustainability by avoiding unsustainable price wars on all products.
Solution Approach 2:
The patent changes the pricing strategy parameter from individual product-based to cohort-based. By evaluating competitiveness at the cohort level and making pricing decisions accordingly, the system achieves better customer satisfaction in competitive cohorts while maintaining overall pricing sustainability through strategic resource allocation.
Data Source
AI summary
A system and method for determining a competitiveness value for set(s) of substitutable items. The method comprises determining, a relative demand value of each set from the set(s) of substitutable items based on a normalized demand value of said each set of substitutable items determined for each of a plurality of digital platforms. The method thereafter comprises identifying, a first target digital platform for each set of substitutable items, based on a demand weighted average selling price of said each received set of substitutable items for one or more of the plurality of digital platforms. Further, to determine the competitiveness value, the method comprises identifying, a second target digital platform for the set(s) of substitutable items based on the first target digital platform identified for each set of substitutable items and a relative demand value of said each set of substitutable items.