CEP, Big Data and Online Price Wars
The other day while reading the print edition of the Wall Street Journal, the article that captured my attention was the frequent price changes in goods supplied through online by multiple retail vendors (Toilet paper price like airline price).
Though this was a case where the online prices changed around 4-5 times during the day with a variation of +-15%, the in-store price did not change. All leading vendors were at some point having the lowest price for the TV. Clearly the commodity pricing similar to airline pricing will pave way for aggressive competition in online retailing. Only with a sound technology backbone with complex algorithms the one-up-man-ship can be achieved. CEP and Big Data combination could be a viable choice and a real-time pricing would seal the deal…
The aspects required to deliver a technology foundation for any online retail warrior would be:
1 - Data from multiple sources and events that will influence the particular commodity’s price
2 - Engine that will use the data and output the best price in real-time or to say before anyone gets the lowest price.
Following figure paints a theory of such a model.
Complex Events Processing strength is in processing in-flight events from multiple sources and compare that with data sets using pattern matching, detection and application of algorithms that will spit out the best price.
Big Data strength is in doing the ground work of comparing multiple data sets available in the enterprise and provide the right set of reference data for the Pricing Engine to make the decision.
Such a model though will require a clear foresight and vision and quite a bit of investment before the returns are actually seen.