MediaFile

Freshplum takes data-driven approach to online pricing

Palo Alto start-up Freshplum hopes to take the guesswork out of digital commerce by using analytics software, data science and math to help companies make decisions like how to price merchandise. 

After a month under wraps, Freshplum announced Tuesday that it has raised $1.4 million in seed funding from New Enterprise Associates, Greylock Partners, Google Ventures and Charles River Ventures, as well as a number of current and former executives from Facebook, Google and PayPal.

The company was co-founded by Sam Odio, who formerly worked at Facebook after his photo-sharing start-up Divvyshot was acquired by the social networking giant. The other co-founders are Nick Alexander and Michael Yuan.

Freshplum will target small- to medium-sized online sellers with revenue but without the time to hire an analytics team. Odio said Freshplum will be able to handle data analysis for these businesses.

“Selling goods and services online continues to be more art than science,” said Odio. “Eighty-two percent of the companies we talk to price their products on a ‘hunch’ because they lack the tools necessary to dive deep into the data.”

IBM knows a thing or two about shoes. Retailers, take note.

By Nicola Leske
In the fickle world of fashion, the skill to predict what will be en vogue next is invaluable to retailers around the world.
While some will argue that it takes style and expertise to predict what customers will want to wear even before they know it, IBM begs to differ.
It comes down to science, specifically IBM’s analytics software.
Take shoes for example, in particular the height of heels.
“We used IBM software to identify those who are the influencers online by searching the web for blogs about shoes,” said John Buscemi.
“We found tens of thousands and narrowed it down to those who were linked to a lot and who in turn linked to a lot of other people…if you had a map they would sit at the center of the social network,” Buscemi said.
According to that analysis, heels are coming down.
“Key trend-watching bloggers between 2008 and 2009 wrote consistently about heels from five to eight inches, but by mid 2011 they were writing about the return of the kitten heel and the perfect flat from Jimmy Choo and Louboutin,” said Trevor Davis, a consumer expert with IBM’s Global Business Services.
IBM said the data could be used by shoe manufacturers and retailers looking for insight into the kind of shoes to manufacture and sell in the coming season — and could potentially put fashion consultants out of business.
By the way, high heels have traditionally been linked to a falling economy — think high heel pumps during the Great Depression and stilettos following the dot-com bust a decade ago.
But this time the decline of the heel may not be a sign of an economic upturn but a grudging acceptance of a long road ahead best to be taken on more modest shoes.
“Usually, in an economic downturn, heels go up and stay up – as consumers turn to more flamboyant fashions as a means of fantasy and escape,” Davis said.
“This time, something different is happening — perhaps a mood of long-term austerity is evolving among consumers sparking a desire to reduce ostentation in everyday settings.”