A website that helps retail business owners optimize their tactical pricing strategy. The service implements a technology that uses mathematical analysis to find the optimal price for the entire product range, a price at which margins and sales volume will be balanced.
We were to develop a website where users could upload files containing data needed to run machine learning algorithms and get results.
The price optimization process is based on working with Big Data. For example, by analyzing the sales history of a business and the market prices of its closest competitors, the system predicts the sales volume of each product at various price levels and - based on the data obtained - finds the most favorable price for each product.
The most challenging task we encountered during development was the problem of identifying dependencies between all pairs of interchangeable and complementary goods. For example, we calculated the product complementarity measure based on information from available fiscal documents; but to train the algorithm, we needed to determine the measure of complementarity - we faced an obstacle at this stage, which was eventually resolved by our data scientists.
While building the service, we had to decide on machine learning techniques to go with. One of the methods we chose was multivariate regression analysis, which can determine the degree of correlation between variables, for example, between complementary and interchangeable products. We also used data clustering and CNN (convolutional neural network).
Before we started to develop the website proper, we decided on the tech stack for the project. As the most popular data science tool today, we settled for Python, which has a rich selection of machine learning algorithm libraries. For example, we applied scikit-learn, sklearn, NumPy and its extension SciPy. The server side of the site was built using Django backend framework and the frontend was implemented in React.js framework.
We have developed a website with complex functionality, a site for determining the optimal price of retail items, which increases gross margin. Our service is already popular among thousands of retailers and is helping to develop their businesses.
