What's up, party people? My name is Sunny Ray. This is the Sunny Ray Show. Welcome back. my next guest, actually I guess maybe my last interview for the week. Second last interview. her name is Vanya. We're going to talk about how retail sits on mountains of data and still guesses at pricing. With that said, Vanya, how you doing?
Hi Sunny. How are you doing? Thank you so much for the invite.
I'm good. Yeah, nice to have you here. I like to just start by going right into the deep end. Like what I guess what are you building? you know, what kind of problem are you solving? You said you're calling in from Peru, right?
No, I live in Peru in Mexico City, but I'm.
Mexico City. Got it. Okay, my bad. But yeah, tell me about I guess yeah, the company that you're the founder of Price Lab.
Yeah, sure. well, Price Lab is an optimization pricing tool that we offer to retailers online and offline. Where we analyze tons of data, we get to some specific conclusions about pricing, about elasticity, basket products, and we're able to recommend prices and discounts to reach better objective based on their necessities. It can be margins, sales, whatever the retailer needs.
Fascinating. So, you were you were doing pricing inside a retailer surrounded by data, right? Well, I guess with no tools. Like what did one, you know, price change actually cost you in hours back then?
Yeah, so back then I was responsible for setting around 3,000 prices, and it took me about 4 hours twice a week. I would look at inventory, margins, monthly sales, and then use my intuition basically to decide what price or discount would help me hit my sales target. So, my pricing know-how was honestly pretty limited, and there was a point probably after the first 100 products in my Excel where the analysis basically stopped, and you just start putting the numbers in. I experienced the exact same thing at two different retailers, and that's when I realized this wasn't just my problem. It was a structural problem across retail.
Oh, wow. Cool. I love that. Okay. So, you've said you hacked the company you worked for to get at the data you needed, right? So, what exactly did you have to go around?
Yeah, so basically I realized that the only way to get out of that tedious Excel process was to build a macros that could estimate some level of price elasticity and help me make better pricing decisions. So, it would also help me hit my quarterly sales bonus, and that's always a goal. The problem was that I needed historical cost data, and I didn't have access to it. So, let's say I had to get creative, find a way around that limitation, and then pull the data I needed to build my own little pricing tool.
Got it. Super interesting. I like that. You did you I guess what is it? Like necessity is the mother of all skill. Hey, look at I have my co-host by the way. He's going to join my party. so I was going to say so you call the gap systemic, right? Not personal. What did you keep hearing from retailers that, you know, turned one frustration into a market thesis?
Yes, I think the key realization was that every retailer had the same problem. They had a huge amount of data, but no real way to turn it into better pricing decisions. So, I kept hearing variations of the same thing. We have the data, but we're still doing pricing in Excel and relying heavily on the experience of our pricing managers. And that's when the frustration became a market thesis for me. So, if this was happening across different retailers and countries, the problem wasn't the people, it was honestly the lack of technology.
Wow, I love that. That's that makes a lot of sense. And you know, retail is like one of the biggest industries on Earth, right? And still runs on 10-year-old processes, right? So, why has software failed to reach it until now?
That's a good question. I feel it's a combination of things. So, COVID was a major catalyst for digital transformation across industries. And retailers started digitizing processes that had been running manually for years. And so many created internal innovation or transformation teams with actual budgets to implement new technology. And at the same time, pricing has always been one of the most important and most overlooked levers in retail. So, for years, retailers knew pricing could have a huge impact, but they simply didn't have the resources or technology to tackle it properly. Now they do. and I think there's also a network effect. once a large retailer adopts a pricing solution or any other solution and proves the ROI, other retailers see that success and suddenly pricing moves from something we should probably improve to a real priority.
What is the most expensive pricing mistake you've watched a retailer make with, you know, perfectly good data already kind of in the building?
Oh, there are so many. it's basically related to margins, the markup of the product. retailers sometimes feel that one category represents the same pricing strategy, but they're not aware that every product has a different role. There are products that you're supposed to sell with a big discount. It's a hook. you've got very exclusive products that are supposed to be sold with a bigger markup. So, they don't do this homework and that is where they lose a lot of opportunity.
And you've also said that your goal is better working lives, not fewer people. So, like how do you sell automation to a floor team without that fear in the room?
I think that the key is to position automation as removing the work nobody wants to do, but not removing the people who do it. And so right now pricing teams spend hours every week cleaning data, updating Excel files, and basically mating making repetitive decisions all the time. And we want to take that work away so they can spend their time on strategy, understanding the business, and making better decisions. And honestly, the best way to overcome that fear is to show people what happens in practice. So, when a pricing manager sees that the technology isn't replacing their judgement, but actually giving them better information and freeing up hours of repetitive work, the conversation changes completely. And we're not trying to replace the pricing manager, we're trying to give them a superpower.
Got it. Can you explain Price Lab to a merchandising director in 60 seconds? Like no jargon, and can you tell me what like changes on their Monday?
Sure. So, Price Lab is an AI-powered pricing platform for retailers. In simple terms, we help merchandising teams decide what price and discount to put on each product to maximize both sales and profitability. And answering to your question, what changes on your Monday? Instead of opening Excel and spending hours deciding which thousands of prices you have to change, you start your week with clear data-driven recommendations. Which products to increase, which products to discount, by how much, and the most important part, why. Your teams Your team still makes the final decisions, but now they can act faster and see the impact of those decisions in real time. So, they know what's actually working and can adjust quickly as well.
That's super impressive. So, Repsol, Claro, Burger King, I get How did the first of those enterprises names actually like find you? Like before anyone was, you know, searching for this category?
I think what's interesting is that they weren't really Not all of them, but some of them, some of the clients weren't really searching for a pricing platform because in many cases they didn't know the category existed yet. So, they came to us because they had a very specific pricing problem they were trying to solve. That's been the case with, for example, Unicomer, Burger King, Mobile. We started by understanding a very specific business problem and then showed them what was possible with data and AI. And then the conversation expanded into how we can implement our solution across their business. So, we're often not selling it into an existing software category, but we're also helping retailers realize that there's a better work and a better way to make pricing solutions and decisions.
So, you guys are also like really investing in growth, right? So, which of those bets is compounding and which one did you gradually like stop?
I'm sorry, can you repeat that question?
You guys are investing in growth, right? In terms of like driving growth now. So, I'm asking like in the last quarter of the things you guys have been doing, like what what's working for you and versus like what's not?
Yeah, sure. So, what we have understood in the last year is that a retailer wants to get to know business cases from the same vertical the same for example, if you're a pharmacy, you want to see other cases of the same of other pharmacies, I'm sorry. And so, now we're trying to specialize on different verticals and creating specialized team per verticals. So, this basically erases all the all countries' names. We focus on verticals. And right now, we have become experts in pharmacies, on electronics, home goods. that's basically what we're doing right now on our growth team.
Wow. you know, inside a retailer that size, like who else has to nod after the pricing lead, you know, has already kind of fallen in love with it?
In most cases, it's usually the commercial director, the pricing team may be the one using Price Lab and getting excited about it, but the commercial director is ultimately accountable for delivering the commercial results quarter after quarter. So, pricing has a very direct impact on the metrics they're measured on, sales, margin, profitability. So, once the pricing team sees the value, the commercial director is usually the person who needs to see that this can translate into measurable business results.
Got it. So, I think VC led your pre-seed, right? So, like what did that round teach you about whose money's worth taking in Latin America?
Well, it's very difficult to understand initially whose money's worth because as an initial picture, like everyone is offering mostly the same thing, which is money. But for us, we value a lot commercial introductions and a good network.
Th- There's a date inside I guess the next 90 days, right, that matters to you guys? Like what I guess what has to be true by then and like what are you kind of like moving towards?
So, but by mid-December, we're launching a new product that I'm really excited about. It's essentially a pricing consultant in a box. It doesn't have a name yet, but from helping a smaller retailer that can't afford a consultant to complementing the work of a large consulting firm. And this the objective is for it to deeply analyze a retailer's current pricing, evaluate what's working and what isn't, and recommend of course a new pricing strategy and business rules. So, there's a huge market of retailers that know that pricing matters, but simply don't know if they're doing it right or why what they could be doing better. So, our goal is to make that expertise accessible through technology.
And if you're right about all of this, Vanya, like what does a retail pricing team look like let's say 5 years from now?
So, I think pricing teams become smaller, more strategic, and AI-powered, spending less time calculating prices and making more time making decisions.
I love it. Okay, where do people learn more about your company? Where do they learn more about you? And then after that I'll bring this one to an end.
Sure, you can find us at pricerapsolutions.com or my LinkedIn profile Vanya Rivero.
Awesome. All right, thank you so much for joining. There's like a whole bunch of people listening live, so I appreciate all of you for tuning in. Anything else, Vanya, we should or should we bring this one to a close?
No. Thank you so much, Sunny, for the invitation and thank you everyone listening.
Have yourself a nice weekend, everyone. Vanya, hang out for 1 minute. I'm going to bring this stream.
