By Sanjeev Sularia

According to the Canadian Competition Bureau, when a retailer sets a sale price, that retailer must have already sold a reasonable quantity at the ordinary selling price or offered the item at the ordinary selling price for a reasonable amount of time. Misleading customers about a regular price is prohibited, as is advertising a sale price and not having enough stock available.

The problem is, the vast majority of Canadian and United States vendors aren’t sticking as close to the law as they should be – as many make the claim that what is being sold at a “.ca” e-tailing URL is “cheaper” than the list price the vendor would charge me in a physical store.

According to a recent article in The New York Times, list price discounting has become “a sales tactic that is drawing legal scrutiny, as well as prompting questions about the integrity of e-commerce”.

E-commerce retailers draw buyers in with “list prices” or “official prices” and mark them down dramatically to get a sale. Online shoppers want to feel they have a bargain, and online retailers want to satisfy that desire. With so many online retailers jostling for business, it seems that it’s becoming increasingly impossible to pay the list price for a product. And given that anyone and everyone shopping in cyberspace is after a deal, this matters.

In fact, our systems, which every day monitor 130,000 brands in 1,100 categories, has itself discovered that in North American sales, only a small set of items are ever sold at list price anyway (no more than 45%). In the case of precious stones & gems, camera accessories, bakery products, baking ware, food cupboard staples like sauces, marinades & dressings, ready-for-consumption frozen and pet care merchandise, with only 1 in 10 instances are sold at list price.

I say Canadian and US, but this is really a global issue. Internet retailers including Wayfair, Walmart, Rakuten (formerly Buy.com), Crate & Barrel and Williams-Sonoma employ list prices to varying degrees; Amazon, the biggest e-commerce player, uses them extensively and prominently. But it’s one that’s come under scrutiny, given recent US legal moves that look set to curb the whole practice, and so will obligate all North American retailers to swiftly change their digital sales techniques.

The backlash against list-price discounting first rose its head in 2014, when a group of California district attorneys brought a false advertising suit against Overstock.com, accusing the online retailer of using misleading list prices in order to exaggerate the amount of a customer’s savings. The firm was fined US$6.8 million, twice the size of the next-largest penalty for false advertising in California, and has also cost Michael Kors US$5 million to settle a class action suit challenging the prices offered at its outlet stores.

With the US government’s FTC (Federal Trade Commission) first off the blocks in investigating these tactics, the mythical iron “standard price” could soon see its demise in cyberspace. According to David C. Vladeck, the former director of that organization’s Bureau of Consumer Protection, after all, “If you’re selling US$15 pens for US$7.50, but just about everybody else is also selling the pens for US$7.50, then saying the list price is US$15 is a lie… And if you’re doing this frequently, it’s a serious problem.”

Contextual understanding is key

The problem here is that getting the pricing facet of online sales is one of the most difficult parts of cyber retail. It is a huge challenge to keep up with a dynamic, ever-changing marketplace; if the price is too high, online shoppers buy elsewhere, if too low you risk your profit margin.

What’s more shoppers thrive on comparing prices, so your relative prices compared to your competitors are paramount. Smart pricing technology will become the next way of enticing and satisfying bargain-hungry visitors to your website, as great data and smart, real-time optimization really is the only chance to evolve your sales strategy past this now-outdated trick. According to Rafi Mohammed, a consultant and author of The 1% Windfall: How Successful Companies Use Price to Profit and Grow, “Online retailers don’t use blowout sales since it’s so easy to shop there. But to provide confidence to consumers that they are consistently getting good deals, it’s even more important for them to provide price comparisons.”

Real-time, constant pricing adjustment based on market factors has to be the solution to satisfying the bargain-hunting appetite of online shoppers in the form of automated price optimization. To get there, pricing response time is key, as automation enables online retailers to optimize pricing 24/7. The market changes quickly and to succeed online retailers need to be able to change pricing to keep up with it.

Technology that can really analyze big data to enable online retailers to get full visibility of new and returning customers, enabling you to optimize for demand, trends, products, price architecture and regional behavioral differences has to be the way forward. But you need a smart, flexible system to get this right.

The verdict’s clear; old techniques can’t be relied on any more. You need real-time, accurate pricing and merchandising intelligence no matter the geography, vital as country boundaries disappear with the rise to dominance of e-retail – and also vital as the threat of legal action if you make any mistakes in this regard takes root.

Volume, pricing and revenue goals with automated price adjustments constantly taking place will enable online retailers to operate with confidence in this “list price” free world. Don’t get left behind.

The author, Sanjeev Sularia, is CEO at Intelligence Node, a leader in the field of pricing strategy automation

Canadian retailers and other businesses can now inexpensively and easily create high quality marketing videos with an innovative new platform. This could in effect ‘level the playing field’ for retail marketing, as video has traditionally been expensive to produce and a challenge to create. A company called Magisto created a platform to simplify the video creation process, which is timely, considering that studies show video to be one of the most effective marketing tools available. Some are even calling it ‘the industrial revolution’ of video.

Magisto recently launched ‘Magisto for Business‘, which gives content creators the ‘creative director’ role without any intensive editing or content production. Magisto’s patented A.I. and new Smart Storyboard™ technology allows for filming on a smartphone, and the result is high quality, easy to create marketing videos.

There’s a story behind how the technology was developed. Founder Oren Boiman is both a scientist and a father. After the birth of his first child, Mr. Boiman and his wife took many digital photos and like many new parents, wanted to make home movies. After taking two weeks to create a high quality three-minute video, Mr. Boiman came to the conclusion that there needed to be a better way. At the time, he was a Ph.D. student researching the science of Video Vision and using Artificial Intelligence to create videos, he created the Magisto video platform.

Magisto has already become the world’s most popular smart video storytelling application that uses Emotion Sense Technology™ — a patented story detection that automatically analyzes and edits raw video footage and photos into movies, making video storytelling simple and easy to share. Initially used by individuals, businesses are now jumping on board to use Magisto, which is available for iOS, Android, PC and the Web. Magisto recently did a survey of its users, and 65% of them said that they already used or wanted to use Magisto in their professional lives.

Video is extremely useful to marketers — Facebook recently reported the number of video views increased 10 times over the last year to 8 billion views per day. It’s clear that video engages viewers and because of this, retailers must seriously consider using it to market to current and potential customers.

How it Works: Magisto is driven by patented Artificial Intelligence technology that selects the most compelling moments from a collection of digital videos and photos and automatically edits them together to create powerful, highly shareable movies that vividly express personal stories with customized themes, styles, and music. A new technology called “Smart Storyboard” ™ can be used to influence production value, define scene selection, refine messaging and brand movies without the usual complexities of video editing and production.

Below is a video from a retailer:

“The Smart Storyboard lets the business user focus on how to tell the story rather than worrying about how to edit, produce and create that same story using complicated tools,” said Magisto’s CEO, Oren Boiman. “It’s a bit like giving specific creative direction to your own video production team; that production ‘team’ just happens to be an intelligent machine that works in minutes rather than hours.”

Due to the traditionally high cost and complexity of producing high-end video, and the low quality results of most consumer video technology, many small and medium-sized retailers don’t use video as part of their marketing mix. Magisto can change that — with 75 million users and 2.5 billion pieces of content analyzed, Magisto’s AI-based video storytelling platform is evolving rapidly, and the improved technology has pushed the boundaries of the quality, ease and scale of video content that can be created by a machine.

“By extending Magisto to businesses, we’ve reduced the cost of producing a professional video by two orders of magnitude, while making it a thousand times faster because it’s generated by a machine,” said Magisto’s CMO Reid Genauer. “Within the last year, we have seen every major social network optimized for video creating the world’s first effective distribution platform for long-tail business video. “This is the industrial revolution of video and video marketing is no longer a “nice-to-have” — it’s critical for any business,” he continued.

Below is a promotional video for a fashion designer:

Magisto for Business incorporates several features specifically designed for small and medium-sized retailers and other businesses including custom scene selection, scene ordering, scene captioning, speech detection and custom branding. It also offers music licensed for commercial purposes, faster movie creation and unlimited HD downloads. New editing styles and algorithms allow the user to tell the Artificial Intelligence engine what the business use case is, enabling the Emotion Sense Technology (™) to make movies that accurately represent those use cases including; Business Overview, Product Demo, Tutorial, Creative Portfolio and Event Recap. Magisto intends to offer dozens of new business use cases to integrate with e-commerce and vertical marketplaces across numerous categories in 2016.

For more information on Magisto, visit magisto.com.