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Towards a Framework for Knowledge-based Pricing Services Improving Operational Agility in the Retail Industry

abstract Marketing research has identified several benefits of dynamic pricing strategies. For example, dynamic pricing in terms of inventory considerations and time horizons, bundling or personalized offerings has been found to increase sales volume, customer satisfaction and to skim reservation prices. However, today’s retailers lack the capability to apply dynamic pricing strategies because of missing pricing services and technical restrictions in terms of adequate delivery technologies such as RFID-based smart product infrastructures. Moreover, dynamic pricing strategies rely on various price parameters provided by several stakeholders such as retailers (e.g., inventory data), suppliers (e.g., recommended sales price), customers (e.g., buying history or products in the shopping basket), or the government (e.g., taxes). In this sense, interoperability is a key factor in dynamic pricing scenarios that can be addressed with the help of semantic technologies. Our objectives are therefore to model, implement and evaluate a framework for pricing services that rely on explicit semantic descriptions and that we call knowledge-based pricing services. The contribution of the current work is limited to the first step only. Thus, we propose a conceptual model for knowledge-based pricing services and provide a corresponding example that shows a personalized pricing scenario within an in-store purchase situation. Further, we draw implications for business models in the retail industry to motivate the adoption of these pricing services. And finally, existing tools (e.g., SWRL, SPDO, ODRL-Services) and delivery technologies (e.g., the Tip ‘n Tell smart product infrastructure), which may play a major role for the implementation of these services, are discussed in order to guide future work. This paper is therefore a first step towards the application of dynamic pricing strategies in retail stores, which has the potential to improve operational agility in the retail industry through an improved availability and quality of price information, and thus may foster the evolution of a new business ecosystem around pricing services
   
type conference paper (English)
   
keywords Retailing, Pricing Service, Semantic Technology, Smart Products
   
name of conference 4th Mediterranean Conference on Information Systems (MCIS'09) (Athens, Greece)
date of conference 27-9-2009
page(s) 1587
publisher Athens University of Economics & Business (Athens, Greece)
ISBN 978-960-98566-7-6
review double-blind review
   
citation Kowatsch, T., & Maass, W. (2009). Towards a Framework for Knowledge-based Pricing Services Improving Operational Agility in the Retail Industry. In , pp.1587. Athens, Greece: Athens University of Economics & Business. - ISBN 978-960-98566-7-6.