AristanderAI optimizes pricing for online shops with Machine Learning
Please introduce yourself and your startup to our readers!
My name is Arne Reichelt and I am – together with my co-founder William Angell – founder of the Berlin SaaS platform AristanderAI. After studying brand communication and working as a freelance digital marketing consultant for several years, I met Will through a mutual acquaintance. William, originally from Detroit, comes from a background of machine learning – prior to AristanderAI, he worked at MIT on autonomous vehicle research, building cost-effective solutions for large-scale, in-vehicle data collection.
At that time, a customer of mine was looking for a software-based solution for efficient price optimization of products in his online shop. The idea for AristanderAI arose from this concrete need. The pricing software available on the market was simply not convincing, and Will immediately realized that artificial intelligence was perfect for pricing to maximize profits.
Why did you decide to found a company?
Effective pricing is still the holy grail. There is hardly any literature or scientific research paper on how price optimization – especially in e-commerce – can be implemented in a targeted manner. Of course, there were consulting services in the past that specialized in this area: defining a better price strategy with customers. But such management consultancies often have long implementation processes for their own software tools or generally the costs for such a project are in the six-figure range.
We saw enormous potential for tackling the concrete problem of “price management in e-commerce” on the basis of the latest state-of-the-art technology. A look at the pricing tools available on the market showed that our approach, our vision, would be novel and above all more effective. Will’s expertise and my know-how in online marketing created the best conditions for a successful start-up. After all, every start-up idea is only as good as its implementation.
In addition, the entire field of AI (Artificial Intelligence) has provided us with many new insights, tools, programming frameworks and algorithms in the last 18 months.
What is the vision behind AristanderAI?
We want to automate pricing. So that normal medium-sized companies and even smaller shops can use the same AI technologies as Amazon, Walmart and Co, the really big e-commerce brands. The integration costs and the total cost of ownership should be as low as possible. AristanderAI turns price optimization with machine learning into a 1-click integration into existing leading shop systems. We make AI pricing accessible for everyone!
At the beginning of the development, we had the vision not only to launch another pricing solution, but also a disruptive innovation that eclipses classic dynamic pricing approaches.
From the idea to the start what were the biggest challenges until now and how did you finance yourself?
The biggest challenge: We just launched our service. Now we have to work hard to convince people that machine learning can do price management better in online shops than people, especially with large product portfolios. We do not necessarily want to replace the pricing manager in the company. We want to distribute resources more effectively and provide him with a platform to get the most out of them. AristanderAI helps with its analysis functions and its automated price updates to intelligently increase the revenue per customer session. And shop operators who are not familiar with pricing can use AristanderAI’s autopilot. It must be made clear to customers that all this makes sense and works.
In general, it can be said that price control is a very sensitive area and requires genuine confidence in the quality of a solution. That’s why we offer a free trial month as well as the possibility to cancel the use of the software at the end of every contract month. Every customer can get an idea of the user-friendliness and, of course, his optimization potential.
Our software is based on new processes that have only recently become conceivable as solutions.
The pure development time for our optimization algorithm was 13 months. So far, a low six-figure investment has flowed into AristanderAI – this was financed entirely by private investors.
Who is your target audience?
In principle, any e-commerce company that is looking for ways to optimize prices in its online shop. After all, extra turnover and profit with minimal risk is exciting for everyone. Of course, shops that have a large number of articles in their assortment will benefit in particular. No matter whether they are B2C or B2B companies. Because: the more products are available in the online shop, the more difficult it is to maintain the entire assortment in a price-optimized way. This is where our machine learning approach scores particularly well.
We find margin-increasing prices faster and more effectively than humans and classic rule-based software solutions.
How does Aristander.AI work? What are the advantages? What distinguishes you from other providers?
One of the main benefits is the super-fast and therefore extremely favorable setup phase. If you run a Magento shop, you’re almost ready to go in 20 minutes: Simply register on our website, then install the AristanderAI extension in the shop, upload a table with the products to be optimised and you’re ready to go. Our pricing software needs no pretraining or the provision of old transactions. AristanderAI learns from the constant customer journeys in the shop. The system tracks what customers have looked at, which products they have searched for and placed in the shopping basket, what prices they have seen and what they have finally completed their order with. This information is then passed on to other data such as temporal factors such as the current day of the week.
Our strength: Especially for the longtail our software finds efficient, morning strong prices faster.
And we can start directly – especially since, as I said, no learning phase is necessary in advance. In addition, unlike other solutions, our product optimizes the gross profit per shopping basket. So we always see prices in interaction with others. AristanderAI provides shop checkouts that bring higher profits. And all this in compliance with data protection regulations, since the optimization is not user-specific.
How’s the feedback?
We just launched our product at the beginning of the year. We have already established through surveys and contacts that there is a great need to optimize product pricing in such a way that performance, i.e. earnings, increase.
Where are you going with Aristander.AI? Where do you see yourself in five years?
Our software is based on new processes that have only recently become conceivable as solutions. The pure development time for our optimization algorithm was 13 months.
So far, a low six-figure investment has flowed into AristanderAI – this was financed entirely by private investors.
What 3 tips would you give other Start-up founders on the way?
1. If your product is clearly defined, communicate precisely.
2. Don’t let failures drag you down.
3. Remain flexible and adaptable.
More information you will find here
Thank you Benjamin Schröder for the Interview
Statements of the author and the interviewee do not necessarily represent the editors and the publisher opinion again.